The Montgomery County Council this week voted 6 to 1 to grant $20,000 of the county's federal community block grant funds to Silver Spring business people who want to study ways to revitalize the once prominent Silver Spring business district.

The money, which will be used to hire a professional consultant, will go to the Silver Spring Development Council and the Montgomery County Chamber of Commerce. The business people will match the funds by donating $15,000 worth of legal, real estate, planning and architectural services, said James Giegerich, the director of the county's Office of Economic and Agricultural Development.

"The role of Silver Spring used to be in the '50s that of the premeir business center of Montgomery County," said Giegerich in an interview. "Now other areas, such as White Flint Mall and Montgomery Mall, have taken over as leading business centers. So where does Silver Spring go from here? The private investment market doesn't know. So they're not investing. They're waiting to find out."

Giegerich said the business community, by this study, will be taking the lead in answering that question.

Council member Esther Gelman said she favored the program. "I want some jobs for youths to come out of this," she said.

Council President Elizabeth Scull voted against the grant. "I'm pleased the business community has made this offer, but I still do not feel this is an appropriate use of block grant funds," she said. "I do not think Silver Spring is in anyway the blighted area associated with block grant problems."

Several Council members argued that block grant funds serve a wide variety of community development programs. The funds are "not necessarily to put a roof over a leaky house in the slums," said Council member Neal Potter.

"The community development block grant program is really a federal program, said Council member Norman Christeller. "It's a very broad program. It covers a wide variety of programs. One of its purposes is to prevent future blight, which is what we're doing in Silver Spring."

The county has $3.8 million for its community block grant program, according to Jacqueline Rogers, director of the county's Office of Community Development.

Speculating on the future of Silver Spring, Geigerich asked, "Do we want to create a regional shopping center? Probably not. But Silver Spring could be a good location for regional federal government offices. It could be an important conference center."

Geigerich noted that the Metro subway, which is scheduled to begin service to Silver Spring Feb. 6, will make the area a quick 12-minute ride from Capitol Hill.

"Or foreign investors could invest there," said Geigerich. "It could become an international center. Silver Spring already has much diversity in terms of different cultures."

The issue that raised the most controversy among Council members this week was a statement that Council member Jane Ann Moore made last month at the end of the legislative session on rent control. At that session Moore accused those Council members who voted against rent controls of "selling out to those who make big contributions to election campaigns."

Some Council members angrily denied the statement at the time, and this week, four of them - Dickran Hovsepian, Norman Christeller, Esther Gelman and Neal potter - issued a statement demanding that Moore show "proof of the accusation" or "failing the proof . . . a public apology."

"I stand by my statement," Moore said during a break in the Council meeting.

One Council member had accused Moore last month of slandering the members by her statement, "I am not slandering them," Moore said this week. "I don't think they understand what 'sell-out' means. I think they're putting more into it than it means." Moore declined to comment further on what she meant by the term "sell-out."

"I am very sorry this had to come as far as the Council meeting," said Scull.

"I shall pursue appropriate action on what I consider an outrageous statement," said Christeller. "I'm left almost speechless from this reiteration of slander."

Hovseplan, who initiated the written statement on Moore's December comments, said he would meet later this week with the Council members who signed the statement to decide what further course of action to take."