The Interior Department has told the city of Alexandria that its water-front does not qualify to be designated a national historic park as he has been urged by national and local conservation groups for the past decade.

A National Park Service spokesman said yesterday that while a study of the waterfront showed there are several historic landmarks, such as the looks from an old canal built to encourage shipping on the Potomac River the waterfront area as a whole does not warrant a historic designation.

In an undated letter to Alexandria City Council member Ellen Pickering, Interior suggested that a four-member committee composed of local, federal and state official and a private citizen be created to study the future of the mile-long waterfront.

Despite the announcement that the National Service had concluded "at this time the waterfront should not become part of the national historic park system, conservationists said they were encouraged by increase expressed by the federal government in the waterfront and said they were confident that the staff-level decision in the Park Service would by reserved.

"I think we're on the road towards the establishment of an Alexandria National Historic Waterfront Park," said Michael Frome, a nationally known conservationist and author who has long had an interest in the Alexandria waterfront.

"This is a recommendation from a couple of young men who don't know any better," Pickering said. "This is not a decision of a secretary of the interior."

The letter to Pickering signed by Richard Mystack, a deputy assistant secretary of the interior, also stated that the Justice Department expects that the court dispute over land titles along the waterfront will be settled by nex fall. However, the suit has been in the federal courts for four years and no trial date has been set.

A Justice Department official familiar with the land title dispute between the federal government, private waterfront landowners, and the City of Alexandria said yesterday he did not know how Interior had concluded that the litigation would be settled by fall and added that "the complexity of this case is such that Interior may wish to revise its position."

Alexandria City Council member Robert L. Calhoun said yesterday the "the National Park Service has always had a somewhat indifferent, stuffy attitude about parks in developed areas. They don't see that as their mission."

Calhoun has proposed that the City Council give Interior Secretary Cecil D. Andrus, a plan under which the federal government would give up all title claim to the waterfront in return for Alexandria's development of a master land-use plan and changes in zoning laws to protect the historic and scenic jualities of the waterfront. Both the master plan and the zoning changes would have to be submitted to Andrus for "his review and comment," Calhoun said.

In addition, Calhoun is proposing the establishment of an Alexandria Waterfront Advisory Committee made up of representatives of Alexandria, Virginia and the federal government to recommend development of Jones point and Dangerfield Island properties on the waterfront, all which are owned by the federal government.

The letter to Pickering was in response to a letter she had written last November to Robert Herbet, assistant secretary for fish, wildlife and parks, asking if Interior had any interest in the Alexandria waterfront.

Some Alexandria officials, such as City Manager Douglas Harman and Vice Mayor Nora C. Lamborne, were upset that the announcement regarding the waterfront had been made in a private letter of Pickering. "The Department of Interior developed a specific approach regarding the waterfront without consulting with city and addressed their plan to one member of the City Council," Harman said. He termed the letter "surprising and peculiar."