The Libyan government, which was booted off Washington's Embassy Row this spring, has opened an office in suburban McLean, using funds that the African nation channeled through a Virginia corporation, a lawyer for Libya said yesterday.

The attorney, Richard C. Shadyac, said the office, which occupies an entire three-story building not far from the McLean Post Office, is handling only the affairs of the 4,000 Libyan students who were permitted to remain in America after the State Department ordered the country's diplomats to leave Washington in May.

"There is nothing mysterious, nothing illegal," Shadyac said. "I have kept the State Department informed."

But at the State Department, officials seemed uncertain about the new office. "The whole thing is under intense discussion," a spokesman said. "We're not quite sure what's going on."

Standing under a color portrait of Libyan leader Col. Muammar Quaddafi in the lobby of the Virginia office, spokesman Mohammed Ayeb offered the same explanation as Shadyac. "It's only for students," he said. "We can't tell you anything else."

Shadyac, who offered more details in an interview last night, said: "I have coordinated totally with them [the State Department]. The old mission was the disbursement agent for the Libyan students and their dependents, paying all their living costs. The void had to be filled."

Shadyac said the office is funded by a nonprofit corporation he established under Virginia law for the Libyan governement, and expressed annoyance at the State Department's reaction. "I have kept the State Department totally advised. It is a disservice to the American people to suggest otherwise. The problem is that the State Department has changed Libya desk officers in midstream. No one from the State Department has called me in the past few days."

The State Department spokesman said it would issue a more detailed statement on the office today.

"We're addressing this right now," he said.

Shadyac said that Abdullah AlMasri, the U.S. representative of Libya-Oxy, the Libya company that deals with Occidental Oil and Gas Co., helped to establish the McLean office. The 12,000-square-foot space was leased from Office Space Management Inc. in Fairfax City, which owns the building and two similar ones next door.

"It beats me," said Office Space leasing agent Gregory A. James when asked if he knew what the purpose of the office was.

James wouldn't say what the Libyan corporation is paying to rent the building, but individuals familiar with rents in the Fairfax County community estimated that such a building would cost about $140,000 a year to lease.

Shadyac said he didn't know how many people would work in the office, but said all would be students and their ages would range from the mid-20s to mid-30s.

A secretary to Al-Masri said the office would have 40 workers.

At present, the United States and Libya have no diplomatic relations. Washington has been trying to establish limited contracts, but the Libyans, according to the State Department, have been insisting on broader relations.

Washington closed the Libyan mission because of what it called "Libyan provocations and misconduct, including support for international terrorism." Earlier two Libyan diplomats were expelled after the State Department accused them of distributing literature to Libyan students here calling for the assassination of Qaddafi opponents.