Plans by developer John O. Antonelli to erect a controversial 90-foot-high office building in the 1700 block of N Street NW were dealt a setback this week when a D.C. City Council committee refused to consider closing an alley that would round out its site.

Antonelli, the stepson of millionaire developer and parking tycoon Dominic F. Antonelli Jr., has been trying for nearly two years to get permission to build on the site he owns with partners. The site is on the south side of N Street a quarter-block east of Connecticut Avenue.

After lengthy procedural wranling, the D.C. Board of Zoning Adjustment last June overrode protests from neighborhood groups and granted Antonelli the right to erect the building provided he maintains the facades of three Victorian-era townhouses at 1752, 1754 and 1756 N Street.

The Dupont Circle Citizens Association and other community groups appealed the zoning unit's decision to the D.C. Court of Appeals, where it is still pending. The appeal does not halt the project

Community groups fear that further development will damage the charm and tranquility of the tree-lined block of law offices, small inns and Victorian homes. Antonelli contends the project is in keeping with larger buildings in the area, including St. Matthew's Catholic Cathedral, immediately to the south.

Lacking a court decision, both sides agree that Antonelli could proceed with the project if the City Council were to approve the closing of an alley, 10 feet wide and 22 feet long, that extends part of the distance behind the three townhouses.

If the alley were closed, its land would revert to Antonelli and his partners and become part of the proposed building site.

The council's Transportation Committee refused last year to consider recommending that the full council approve the alley closing. On Wednesday, when the issue came up again, the Transportation Committee voted 3 to 2 to set it aside again. It cannot be taken up again unless the council votes to do so.

The city's Home Rule Charter limits the council's power to deciding whether the alley is "useless and unnecessary." The council has ho authority over zoning decisions.

Council member Hilda Mason (Statehood-At-Large) made the motion to block action, saying the council should not act while the issue in undecided by the court. John L. Ray (D-At-Large) disputed this, saying thee council itself had voted a day earlier to extend the city's condominium conversion moratorium despite a pending court challenge of the council's procedure.

Mason insisted the issues were different enough to justify blocking the alley-closing proposal. She said opponents of the building could not seek an injunction to block its construction without posting a prohibitively expensive bond of perhaps $1 million.

Mason and Polly Shackleton (D-Ward 3) voted to block consideration. Ray and committee chariman Jerry A. Moore Jr. (R-At-Large) voted for it. Charlene Drew Jarvis D-Ward 4), resting her chin on her hand, pondered silently for nearly a minute before casting the decisive opposition vote.

Jarivs said later that construction of the building would have been irreversible even if the court were to rule against Antonelli once the project was begun.

Antonelli's lawyer, Iverson O. Mitchell iii, said he was disappointed, but expects the project to proceed eventually. He said his clients have a lot of money tied up in the site.