The Prince George's County Council yesterday killed a controversial measure that would have made residency in the county a condition of employment for new Prince George's workers and permitted government officials to fire employes if they moved elsewhere.

In voting to kill the proposal by holding it indefinitely in committee, members of the council said they felt that it was an example of "bad government," and criticized the District of Columbia government for having put such a law into effect last March.

The District is the only jurisdiction in the Washington area that has adopted a blanket residency requirement for its new employes.

"The most important thing we're concerned with is the service produced, not where county employes live," said council member Floyd E. Wilson Jr. "Because the Distric of Columbia passed a law -- a bad law -- it doesn't mean Prince George's County should be patterning itself after that. The District does a lot of things we don't do, thank God."

The measure, proposed by council member Sue V. Mills, would have made county residence a requirement for hiring, but there would have been certain exceptions for employes already on the payroll.

County employes who lived outside Prince George's on March 1, 1981, would not have been required to sell their homes and move into the county. In addition, employes whose spouses were required to live in another jurisdiction as a condition of their own employment would have been allowed to reside in that jurisdiction.

A similar measure proposed by council member Gerald McDonough, which would have required all department heads to live in the county, also was held in committee indefinitely and therefore killed yesterday.

Mills' and McDonough's bills were held in committee by 9-to-1 votes; an amendment to require residency only for new employes was killed by a 5-to-4 vote.

Mills said she proposed the county residency requirement because she felt it was "most logical that those working within county governments should live in the county governed by the same laws as those who pay their salaries through their tax dollars.

"Anyone who is willing to work among us but not live among us can't think very much of the Prince George's County residents who pay their salary," she said.

Other council members said the measure would have placed an unfair hardship on county workers, especially younger ones who can't afford housing in Prince George's and have chosen to live in Anne Arundel, Charles and other counties where it is less expensive.

Council member Deborah Marshall, reiterating the concerns of various union leaders who represent county employes, said she felt the bill was an unnecessary infringement on workers' freedom of choice. "This feels so much like Big Brother to me that it's incredible," she said.

According to officials in the county personnel department, 821 of the approximately 3,700 persons who work for the county government live outside Prince George's. This number does not include teachers, who are hired through the school system and many of whom live in surrounding counties and the District of Columbia. It also does not include county police officers, about 20 percent of whom live outside the county, according to Police Chief John McHale.

The County Board of Education recently considered and then rejected a residency requirement similar to the Mills bill for all newly hired schoolteachers. Instead, it adopted a hiring policy that gives preference to county residents. A similar procedure that governs hiring for all county government jobs has been in effect since 1975, according to county council staff.