"Governor, did you cave in on this?"

The question came at a small, hastily called news conference Monday as Gov. Harry Hughes was explaining his newly revised program for state prison construction. Included in the program was seed money for a new prison: a project legislators had repeatedly demanded and the governor had once rejected.

Hughes paused a moment before answering, then, citing legislative demands for facilities to house 1,000 inmates -- facilities twice as big as his new proposal -- he said, "in no way are we caving in to those kinds of figures.

"The idea is to accomplish a job and that is what we are doing," he added, his words picking up momentum as he spoke.

"We are working with the legislature. The important thing is the end result."

The question and the answer effectively framed the terms of a debate going on among legislators, bureaucrats, lobbyists and political observers in Annapolis, a debate over the way Harry Hughes does his job.

"Hughes determines what he wants, sends out trial balloons, gets reactions, works out a compromise, and solves the problem," said State Sen. John J. Bishop Jr., a Baltimore County Republican who served in the 1960s.

"His job is to provide solutions to problems."

But the same flexibility that gives Bishop optimism leaves Del. Steven V. Sklar uneasy. "It's a disturbing tendency, if not a trend, that every administration program is up for revision or withdrawal. When there's any kind of resistance, rather than fighting this, it's a response of appeasement.

". . . You've got so many disparate political forces here in the legislature that to defer to that is to defer to anarchy and chaos," the Baltimore Democrat added.

Right now, the chaos is not easy to see. With the legislative session nearly two-thirds complete, the roadblocks facing some of the crucial issues have apparently been removed. The questions now center on how the path was cleared: was it by adept conciliation by Hughes, or simple capitulation?

For instance, to win support of his $90 million transportation program, which includes $23.1 million in aid to Washington's Metro system, Hughes withdrew his proposed increase in vehicle registration fees.

The opportunity to reach this compromise came when Budget director Thomas Schmidt recalculated the state surplus 10 days ago and determined that unexpected revenues would more than make up the $20 million extra the new registration fees would provide.

In the case of state aid to education, the same surplus, appearing on cue like a beneficent genie, allowed Hughes to avert a confrontation with legislators by handing out $17 million more than he had planned and making everybody happy.

And, when Baltimore City's mayor and legislators complained that Hughes had reneged on a promise to provide state money for police salaries, the surplus once again came to the rescue, allowing the governor to commit $2.7 million more to the city.

"He's doing good," said an approving State Sen. Tommie Broadwater Jr. (D-Prince George's). "He's got the money to do good . . . The problem (between governors and legislatures) in the past has been money. He's using the surplus very wisely."

"The art of politics," added Broadwater's colleague, Sen. Clarence Blount (D-Baltimore), "is being able to resolve issues, not to fight and lose."

But among other legislators there remains a lingering ambivalence, as they ask what will happen in future years, when there is no magical $350 million surplus available to keep everybody happy.

"Most of the hot issues we've had have melted away as the result of the big surplus," said Sen. Laurence Levitan, a Montgomery County Democrat. "But in each case the governor has capitulated and compromised."

There was one problem for which the surplus could provide no remedy. The governor had, for a year, stood firmly behind the idea that Maryland's prison overcrowding should be alleviated by a new approach to corrections, liberalized parole and work-release programs, and the construction of minimum-security, community-based rehabilitation centers.

For a year, that philosophy had allowed Hughes to avoid choosing a site for a new prison and throwing a political firecracker into the legislature. By this week, it became apparent that the funds needed to build the rehabilitation centers -- the most tangible elements of his program -- would be in jeopardy if legislature demands for a new prison were unmet.

On Monday, he met those demands.

"I don't understand. If the governor shifts his own plans or modifies them, that's somehow a cave-in," said Hughes lobbyist John F. X. O'Brien. t"But if the legislature adopts a gubernatorial program, that's not a cave-in for them.

"The governor is joining with the legislature, as the legislature is joining with the executive in formulating state policy. I don't think it's fair to characterize a shift on the part of either as a cave-in."

"He's not a stubborn man. He's not an unreasonable man. He's trying to be, I think, helpful in terms of trying to implement the wishes of the General Assembly," added O'Brien."If he weren't attempting to do that he'd have a difficult time getting his programs through."

House Speaker Benjamin L. Cardin, who early in the session was pictured by Hughes opponents as the man who was really running the state, said today "there really haven't been major changes in Hughes' programs." He paused, then added, "with two exceptions -- transportation and corrections. h

". . . But because of the power a governor has he must always be willing to change his mind. I personally respect him for it . . . And the results have been consistent with his overall plan."

How smoothly would things be going in Annapolis if there were no budget surplus? "That's a terrible thought," laughed Cardin. "Most likely there would have been less comprise because you wouldn't have had the ability to compromise. When you have a surplus, it's easier to take care of people's needs."