The last brick may be about to fall in the 20-year-old dispute between the U.S. Postal Service and the city of Frederick over the 1917 Greek Revival post office building there.

This week the Postal Service will open bids on demolition of the old building to make room for an additional parking lot adjacent to the modern brick post office built in 1977.

Frederick's Historic District Commission contends, however, that the original demolition permit, issued in 1976, has expired and new permission must be obtained.

Under state historic preservation laws, the commission probably will delay the demolition 90 days while the economic feasibility of saving the building is studied, according to Cherilyn Widell, former Frederick County historic preservation officer who is a technical consultant to the city's preservation commission. The commission could decide to prohibit demolition, although Widell said she considers that less likely.

The old post office was first saved from demolition in 1977, through the efforts of Maryland's congressional delegation and the Advisory Council on Historic Preservation, the national preservation body.

Under an agreement with the Advisory Council, Rep. Beverly Byron (D-Md.) and Sens. Charles M. Mathias (R-Md.) and Paul S. Sarbanes (D-Md.), the Postal Service agreed to make three attempts to find a buyer for the two-story building, which is one block from the heart of downtown Frederick.

Bids of up to $101,000 were received from several reputable Frederick businessmen, but all were turned down as too low. Two higher bids, one of $253,000, were deemed acceptable, but they came from businessmen who subsequently left Frederick.

The Postal Service says it has fulfilled both the letter and the spirit of the 1977 agreement, and since its efforts to sell the building have failed, it is now going to have it torn down.

To Frederick officials this is not just a historic issue, but an economic one as well. They would like to see the property restored and kept on the city's tax rolls. If the building is demolished the site will become the third federally owned parking lot for the post office, which already has more off-street parking space than it needs, city officials say.

Trouble between the Postal Service and the city of Frederick is nothing new. "In the early 1960s postal officials demolished almost a whole block of 19th century buildings and then, after leaving the site vacant for a number of years, they decided that it wasn't big enough and that they would move out of town," said Widell.

Local and congressional opposition forced reversal of that decision, however, and the cleared site on East Patrick Street was used. But the ill will generated by that episode apparently colors the current demolition controversy.

Frederick officials are still trying to find a buyer for the 1917 building, presumably one willing to pay more than $101,000 for it.

Last week, Joe McDonald, a spokesman for the Postal Service in Washington, said, "As far as we're concerned the issue is dead. We intend to tear the building down."

Widell and an aide to Rep. Byron said, however, that the question may not be settled yet.