An announcement of candidacy by congressional staffer Johnny Barnes set the stage yesterday for a likely bruising political battle for the at-large seat on the D.C. City Council being vacated by mayoral aspirant Betty Ann Kane.

With his wife and one of his two sons standing at his side in Western Plaza, across Pennsylvania Avenue from the District Building, Barnes told reporters that economic development will be the cornerstone of his campaign and his hoped-for tenure on the council. He urged incentives for business, especially in depressed neighborhoods.

He also said the council must share responsibility with the mayor for making sure the city government functions properly.

Barnes, 34, staff counsel for the House District Committee and former legislative counsel to congressional Del. Walter E. Fauntroy (D-D.C.), said he is seeking the Democratic nomination for the council seat. That pits him directly against council member David A. Clarke, also a Democrat, who has announced he would give up his Ward 1 seat to run for the citywide post.

Barnes, who lives at 3014 V Place SE and is a Georgetown University Law Center graduate, said he does not yet have a hoped-for endorsement from Fauntroy. He unsuccessfully sought appointment to Marion Barry's vacated at-large council seat in 1977 after Barry became mayor. In 1980, he lost the Democratic nomination for the Ward 7 seat to H.R. Crawford by 164 votes out of 6,864 cast. Crawford was elected in the general election.

The seat being vacated by Kane is one of two at-large council posts to be filled this year. Under the Home Rule Charter, the other seat is, in effect, reserved for a non-Democrat. It is now occupied by Statehood Party member Hilda Mason, who is expected to announce for reelection.