The Prince George's County Council recommended last week that the Washington Suburban Sanitary Commission cut its proposed $335 million budget by nearly $12 million to keep consumer water and sewer rate increases to 22 percent.

The original WSSC budget called for a 35 percent increase in water and sewer rates to take effect July 1.

Under the proposal for a 35 percent hike, the average consumer would pay $68 more each year for water and sewer services. In comparison, the council cuts would lower the average annual increase to $42.

The Prince George's recommendations will be sent to the Mongomery County Council on April 29. The two county governing bodies will meet together May 22 to make final recommendations n the bicounty agency's budget. Shortly thereafter, the WSSC commissioners, who usually go along with the recommendations of the councils, will approve the final fiscal 1981 budget.

Prince George's council members made few changes in the WSSC's $205 million capital improvements budget, but pared $11.9 million from the agency's $150.3 million operating budget.

The council saved more than $3 million by drastically lowering the fund reserve allowed the WSSC to cover revenue fluctuations. Another $5 million was saved through program reductions, including the elimination of 37 new or existing jobs, and adjustments in wage and salary packages.

Some of the pressure for a larger rate increase was removed when the council found an additional revenue source to cover debt service costs, which account for nearly a third of the operating budget expenditures. By increasing the fee charged for putting new housing units on line from $750 to $1,560, the council added $2.7 million to the WSSC's income.

Further savings were brought about by reducing funds for support services such as the WSSC's electric bill. When the two county councils meet in May, the members may have to add money to the capital improvements budget to comply with a federal court order handed down this week requiring the WSSC to build a controversial sludge disposal facility in Montgomery County.

That facility would take sludge from Montgomery that is processed at the Blue Plains Sewage Treatment Plant in the District. Prince George's officials have opposed the construction of the plant because it would be located on a site in Montgomery County at the border with Prince George's and near the Prince George's community of Calverton.

Montgomery officials have supported the project because of a 1978 court order requiring each of the suburban jurisdictions using Blue Plains to dispose of a certain amount of the sludge produced there.

Land condemnation proceedings for the project site were to begin this week. The project had been included in the 1980 capital improvements budget but was left out of this year's budget because of an impasse between the two county delegations on the WSSC.

A spokesman for the WSSC said that a decision probably would not be made until the condemnation proceedings are over and the county councils have made their other decisions on the fiscal 1981 budget.