Virginia highway officials today rejected a plan to shift millions of dollars in the state's $1 billion-a-year highway allocation program from rural areas to rapidly growing urban areas, such as Northern Virginia.

The decision means that legislators will face tough obstacles as they attempt to agree on changes in the highway-funding formula that they will recommend to the 1985 General Assembly session, which begins in January.

"It will be a classic showdown," said State Sen. Charles Waddell (D-Loudoun County), chairman of the Senate Committee on Transportation and vice chairman of the special joint House-Senate committee that will make the recommendations.

The highway department's stance means that some secondary roads in Northern Virginia and other urban areas, which regularly carry more traffic than some primary state highways, will continue to get less funding, according to state Del. Vivian Watts (D-Fairfax).

"I went after the highway department," said Watts, a member of the joint legislative committee, which met here today. She said the highway department appeared "more worried about a 50-mile trip that takes an hour, rather than a 15-mile trip that also takes an hour."

The highway officials also suggested that growing costs for the Metro system in Northern Virginia and other mass transit plans be financed through local-option taxes, rather than by simply increasing state funding.

In addition, they rejected a proposal to establish a separate mass transit fund, suggesting that the funds might be used to pay for union-negotiated wages in a state that is strongly opposed to collective bargaining for state employes.

The largely negative report by the Department of Highways and Transportation and the State Highway Commission came in response to changes proposed last December by the influential staff of the Joint Legislative Audit and Review Commission.

"In some instances . . . we are not certain the JLARC staff has fully considered the long-term implications of its proposals," said Highway Commissioner Harold C. King, in an appearance before the committee today on behalf of both the department and the commission.

"I think you'll find that the meat-and-potatoes of what JLARC recommended has been rejected," a department spokesman said later.

It was the latest step in a decade-old battle by urban and suburban legislators to get more highway funds for their areas, a move vigorously fought by representatives of rural areas that traditionally have controlled highway funds.

"We are going to have to make some concessions," Waddell said. "If we can put the [urban-suburban] coalition together this time, then we would have a fair shot at establishing highway equity based on need -- and that's our goal."

Highway commissioner King said the agencies were not convinced the current highway formula -- a complex measure of population, density and miles traveled -- could be changed in a fair way.

"While not opposed to a change in the current formula," the formal report said, "the commission believes the alternatives offered . . . offer no improvements." The report said the department would spend about $560,000 to study actual mileage usages in the state, which could affect the formula.

"Some of their objections we anticipated," said Waddell. "We knew that there was going to be a lot of give and take on this."

Despite the major disagreements, Waddell said he was pleased that the highway officials agreed to about 15 of the 30 proposals suggested by JLARC.

One change approved by the highway officials would eliminate the legislative agreement that no jurisdiction get any less money than it had received the previous year. The elimination of that provision is likely to be fought by smaller and less-developed counties.

On other issues, the highway department also opposed a JLARC suggestion that more funds be spent for paving dirt roads.

Watts said another controversy is a claim by JLARC the department could spend an extra $20 million a year on construction with funds that it has budgeted for maintenance, but doesn't need. The department has rejected that suggestion.