The Prince George's County Council yesterday empowered itself to usurp County Executive Lawrence J. Hogan's role in deciding where to run water and sewer lines, the key to the county's future growth.

The action, which Hogan characterized as " a ripper bill," reflects a widening rift between the all-Democratic council and the county's sole elected Republican. Hogan and the council also continued an increasingly bitter feud yesterday over possible conflicts of interest involved in support for state-backed loans for businesses in the county.

Hogan said the council is threatening to strip him of his authority over sewer and water matters and expressed concern that it may go further, taking away his power to appoint sewer commissioners and member of the planning council. That would effectively remove him from the long-range planning decisions affecting the county.

Council members said they acted because Hogan has refused to negotiate any regional sewer issues since July 10, when the council rejected his nominee to the Washington Suburban Sanitary Commission.

But there is an underlying policy dispute between Hogan and the council. Hogan has proposed that the county postpone the construction of nearly all new homes in an attempt to meet the revenue limitations imposed by the TRIM revenue ceiling amendment voters attached to the county's charter last November.

The council's action yesterday, adpoted as amendments to the countyhs 10 year water and sewer plan, didn't actually take Hogan out of the decision provess. But it empowered the legislative body to make future decisions on water sewer allocations without the county executive. It also enabled the council members to negotiate regional sewage issues on their own.

"We didn't feel the workings of the government should stop because of a single appointment," Council Chairman William B. Amonett said. "Since we don't know how long the boycott will last, we decided we would have to take over the whole thing."

He added that the council was concerned over several issues pending before the bicounty WSSC, including Montgomery County's request for increased capacity at the Blue Plains regional treatment facility and a dispute over where to dump Maryland's share of sludge processed at the Blue Plains plant.

But council member Parris N. Glendening referred to the larger question of growth in explaining the bodyhs action.

Hogan recently sent the council his proposed 10-year water and sewer plan, the county's bluprint for development, which recommended that Prince George's delay nearly 99 percent of the 12,400 residential units now planned.

But Glendening said the council wants a continuous growth rate and is "willing to make all the decisions on this to implement that policy."

In the continuing dispute over business loans, Hogan said he wants the county's Board of Ethics to study the county's involvement in a proposed state-backed loan to the Garfinckel's departmant store chain to build a new warehouse, a project Hogan has opposed.

Hogan questioned the work of John McDonough, a lawyer for Garfinckel's who was an aide to former county executive Winfield M. Kelly Jr. (D), Hogan's predecessor.

Hogan also noted that McDonough's brother, Gerard McDonough, is a County Council member. In a memo to the council, Hogan cited a county ethics code provision that he said bars former county officials for a year from acting as agents in business involving the county.

This was quickly dismissed by irritated council members. The council's attorney, Lionel M. Lockhardt, said the law Hogan cited apparently did not apply to McDonough because it prohibited county officials from acting as private agenst only on business in which they made decisions while in office. John McDonough left his job as Kelly's aide before Garfinckel's applied for the loan.

Council colleagues of McDonough said he had had no invilvement with consideration of the Garfinckel's loan.

The council dismissed both Hogan's memo and his previous criticism of the proposed Garfinckel's development which Hogan has referred to as "just another warehouse," and voted to unilaterally forward the company's loan application to state officials for approval.

The executive has withheld his endorsement, which also is required for state approval of the low-interest loans sponsored by the Maryland Industrial Financing Authority.

In June, a Garfinckel's executive charged that a county official told him that Hogan might reconsider his opposition to the companyhs project if Garfinckel's made an $80,000 donation to a private charity supported by the county. Hogan responded that no quid pro quo had been offered.

On Monday, Hogan referred another loan application to the county ethics panel after disclosure that he had given it his support without revealing that Hona Hogan, his wife and law partner, represented the firm, District Moving and Storage Co.

In a related development yesterday, Stephen Hartman, a real estate representative for an appliance firm, said he also was told that the firm's application for a state-backed loan would be favorably considered if a donation was made to a county-endorsed charity.

Hartman said the suggestion came from Paul Gilbert, the official who suggested that Garfinckel's make such a contribution Hartman said Gilbert told him in May that the application of Trible's Inc., a District of Columbia firm, for a loan to buy a warehouse in the county, might be approved if the company made a donation of $50,000 to $100,000.

Gilbert said he had no recollection of the conversation, had no knowledged of the application and that the matter has never come to Hogan's attention. CAPTION: Picture, LAWRENCE J. HOGAN . . . seeks housing delay