The federal Fine Arts Commission yesterday reaffirmed its March decision opposing a $150 million development on the decaying Georgetown waterfront, leaving the fate of the project up to the District government.

Mayor Marion Barry, whose administration can issue or deny a building permit for the project, has yet to make a decision on the proposal. However, city approval of the development is considered unlikely since the mayor has never overruled a Fine Arts Commission recommendation and he has repeatedly said that the commission, like many Georgetown residents fighting the development, favors a park on the Georgetown waterfront.

"We have a short-term concern about removing the blight on the waterfront," Commission Chairman J. Carter Brown told a standing-room-only crowd of more than 100 people jammed into the commission's small town house headquarters on Lafayette Square.

But he insisted that the commission, architectural guardian of the capital, must consider the long-term benefit for the city. He said the development proposal would have "an irreversible" impact on a historic waterfront.

Brown, also director of the National Gallery of Arts, said the waterfront has been ugly for years and may stay that way for many more. But he said Washington has had blighted areas that have taken decades to turn into what are now considered national treasures. He noted that the Washington Monument and the Capitol Dome sat incomplete for years and the World War I "Tempo" buildings beside the Reflecting Pool were demolished only 11 years ago.

Georgetown Harbour Associates, which has spent several million dollars and two years designing the waterfront complex, requested that the commission rehear arguments for its controversial proposal after the panel rejected its last month. General partner Herbert S. Miller contended yesterday that previous commisstion actions had encouraged the firm to think its project was going to be approved and that to reject it now was tantamount to confiscating the 6.5 acres of land held by the development firm.

Brown said the commission has commented on the proposals in order "to minimize the impact of an adverse development" should the city ultimately approve the project.