An Alexandria Circuit Court judge yesterday cleared the way for the city government to proceed with controversial changes in the city's police and firefighters pension plan.

After a two-hour hearing, Judge Albert H. Grenadier denied a request by public safety employes that he block implementation of the plan pending the outcome of a lawsuit filed by the employes.

Attorneys for both sides agreed to take up the matter in a hearing scheduled for July 19. If the dispute is not resolved then, the case will go to trial on Aug. 1.

Early last month, friction between City Hall and its 400 public safety employes began to mount as the City Council began serious consideration of ways to restrict what it termed "too liberal" retirement benefits, particularly in the area of partial disability.

On May 24, the council unanimously adopted a range of amendments to the pension plan that city personnel officials said would save the city $500,000 and reduce the potential of abuse in the system.

But associations representing the interests of Alexandria police and firefighters claimed the measures were improper and the procedure in which they were enacted illegal. Their attorneys asked the circuit court to prevent the city from implementing the plan.

"We just wanted to try to halt the administrative process while this issue was being resolved," said Richard Wohltman, an attorney for the employes. "It seemed a waste of the city's resources."

Wohltman argued yesterday the city violated "general law" when it amended the pension plan by a motion instead of an ordinance. By using a motion, he said, the city did not give his clients a proper public hearing to consider the proposals' ramifications.

Abbe Lowell, an attorney representing the city, denied the charge. City Manager Douglas Harman, who testified during the hearing, said city finances would be harmed if the pension changes were stalled.

He explained that the plan's anticipated savings to the city already have been incorporated into the city's fiscal 1984 budget. If the plan is halted, the city would be at least $500,000 over budget and would be forced to consider raising real property tax rates 2 cents to compensate for the shortfall.