About 40 faculty members cancelled classes yesterday and marched with picket signs in the snow at the Van Ness campus at the University of the District of Columbia to protest a new city law that they say threatens tenure rights and protection.

The law, passed by the City Council on Jan. 10 allows the university trustees to make temporary appointments to new university-wide positions before permanent personnel policies are adopted.

The trustees said they need the authority to begin shaping a consolidated university out of the city's three public colleges - Federal City College, D.C. Teachers College and Washington Technical Institute. The colleages officially were merged last August and have a new president, Lyble C. Carter, Jr. But their programs, courses and personnel rules remain separate.

Yesterday's protest at the Van Ness campus, which used to be WTI, was led by Emmanuel Chatman, dean of business and public administration. Chatman said he feared the council law was written so broadly that it would "abolish all tenure rights and ranks" and allow faculty members to be shifted to new jobs or demoted with little protection.

The law was passed unanimously by the council as emergency legislation. It went into effect for 90 days last Thursday without the signature of Mayor Walter Washington.

University President Carter said the protestors misunderstood what the law allows the trustees to do. In a statement issued around noontime. Carter declared that the law "in no way changes the substantive rights of individual university employees."

He said in an interview that faculty members and administrators at the Three former colleges would be able to continue in their jobs, although in some cases acting officials - with authority over all three branches of the university - might be placed over them.

"If I appoint one person to a position where there had been three positions before," Carter said, then there might be problems. "Most people are accepting this, but there are some individuals who are trying in one way or another to fight these decisions."

Carter also urged the striking faculty members to return to their rooms, but Chatman said they would not resume teaching until the Counciil act was rescinded.

Although the city law affects all three branches of the university, yesterday's protest was confined to Washington Technical Institute. Chatman said he expects it to spread today to the other two campuses if classes are held.