The Leesburg Town Council rejected the recommendation of its staff last night and awarded a cable television franchise that some observers believe will give virtual control of local news disemination on the system to a politically influential newspaper here.

The councul awarded the franchise to Storer Broadcasting Co., one of the country's largest firms involved in the burgeoning industry. Several months ago, Storer entered into an agreement with Loudoun County's leading newspaper, the Loudoun Times-Mirror, guaranteeing the paper "exclusive local origination news broadcasting" when the million-dollar system is completed.

Some city officials have voiced concern that if Storer won the franchise its agreement with the paper would give the Times-Mirror a monopoly on local TV news. The agreement also includes "exclusive" rights to "cutway time of any national all-news channel(s) offered to subscribers within the franchise area."

The editor of a competing newspaper, the fledging Monitor, has said the agreement would drive him out of business.

Officials of the company recommended by the city report -- Matrix Enterprises -- said they were "deeply disappointed" by the council's vote and would not rule out the possibility of a court challenge.

"I've got a really bad temper and I'm really mad," said John Lubetkin, Matrix vice president. "I think I'll just go home and get some sleep."

The franchise is expected to bring cable television to between 2,000 and 3,000 homes in this town of 10,000. And although it is seen by several officials of companies who bid for the franchise as "not particularly lucrative," it is also regarded as a stepingstone to franchises elsewhere in the county.

Storer is expected to gross revenues of about $750,000 annually.

Since June, officials of the four companies involved in the bidding and leading citizens recruited by them as shareholders waged a vigerous battle for the franchise. In Leesburg, political ties are close and generate clout. f

The "rent-a-citizens," as they have become known, included the owner of a local restaurant, the wife of one of the town's leading real estate developers, a county Chamber of Commerec official and the president of the Eastern Loudoun Planning Committee.

It also was learned last night that the lawyer who represented Storer and the Times-Mirror in the case, Charles Ottinger, was a financial director in the mayor's last campaign.

Leesburg's seven elected council members said they had been the target of intense lobbying.

"This was the most serious and pressured decision I've ever had to make," said councilman G. Dewey Hill, who stuck with Matrix through two rounds of voting. The final vote was 4 to 3.

Storer initially had offered 10 percent of the franchise to the town's Chamber of Commerce, which refused. Officials of Storer's three competitors objected to a "letter of intent" sent by the Times-Mirror concerning new broadcasting arrangements, calling it "heavy-handed."