A House Appropriations subcommittee today gave a setback to Gov. Harry Hughes and his staff by voting to cut off funding for two 250-bed prisons scheduled to be built in Baltimore, deciding instead to locate the 500 beds elswhere in the state prison system.

The two prisons, known as BG&E 1 and 2, since the two sites were purchased from the Baltimore Gas and Electric Co., were deemed by the subcommittee to be too expensive because of high construction costs in the city. The subcommittee voted to add the 500 beds to the proposed 1,000-bed prison scheduled to be built in rural Somerset County.

Because of a breakdown in communications between House Speaker Benjamin L. Cardin, committee chairman R. Clayton Mitchell Jr. (D-Kent) and subcommittee chairman Timothy F. Maloney (D-Prince George's), the subcommittee voted to move the 500 beds to Somerset thinking Cardin approved of the move.

Cardin had spoken to Mitchell and Maloney on the speaker's podium during yesterday's session of the legislature and the two had left with the impression that Cardin had approved the move. Cardin said yesterday he did not realize exactly what they were proposing.

"I thought they were just saying they were going to take away the funding for BG&E, and that was okay with me," Cardin said. "But I didn't realize they were talking about moving them to Somerset. I think that's a mistake. That might jepoardize the 1,000 beds planned for that site and I don't want to do that."

Cardin told that to Maloney this afternoon and Maloney agreed to ask the subcommittee to change the bill so that the location of the 500 beds would be left unspecified.

Hughes staffers said they were upset about the plans to cancel the prisons, especially BG&E 1, where $2 million already has been spent in the planning process. Sources said this afternoon that Hughes would concede defeat on BG&E 2 but would probably fight for BG&E 1.