Major construction trades and public employee union officials appeared at a press conference yesterday to denounce as "illegal" Councilman Marion Barry's demand that 100 percent of all workers on the city's federally funded public works projects be District of Columbia residents.

About 110 union officials and rank and file members, all of them strong supporters of Mayor Walter E. Washington, one of Barry's rivals in the mayoral Democratic primary race, held the 15-minute press conference on the District Building steps.

The union officials and the union members, some of whom were brought to the 4:15 p.m. conference in a yellow school bus with Virginia tags, represented the Greater Washington Central Labor Council and the Washington Building and Construction Trades Council. The Central Labor Council represents 145 unions with a membership of 200,000 which includes the membership of the Construction Trades Council.

A majority of the rank and file union demonstrators were members of the mainly black Building Laborers Local 74, half of whose 4,000 members live in the Maryland and Virginia suburbs, according to its president, Henry Brock.

Joslyn N. Williams, chairman of the Central Labor Council's public employe committee, was the first union official to address the crowd.

"The basic rights of working men and women" to live where they want to "without coercion is being challenged," Williams said. "It is our responsibility and our duty to see that our members and our workers do not become political pawns for politcians." He spoke to loud cheers of the demonstrators.

Figures compiled by the D.C. Manpower Department show that the two-year-old $40 million federally funded public works project aimed at relieving a 7.2 percent unemployment rate in the District of Columbia has employed 49 percent of the city's residents. The other workers employed in the program - 51 percent - have come from suburbs.

David L. Robinson, president of the Construction Trades Council, said "that it is illegal to require all workers on public works projects to live in city in which they are employed." Robinson added that "without a doubt," suburban jurisdictions woud begin a "regional war" by firing some 70,000 District of Columbia residents who work in Maryland and Virginia.

D.C. Manpower labor official, John T. Gallahan, said as of April 68,000 of 302,400 employed District residents work in the surrounding suburbs, a figure amounting to 22 percent of all the city's employed residents.