Almost one month after deciding to leave his job, Fairfax City Fire Chief Harold E. (Gene) Dailey last week withdrew his resignation following the City Council's redistribution of authority within the fire department.

Dailey's decision was announced last week by City Manager Edward A. Wyatt at a City Council meeting.

The 55-year-old chief, whose resignation had not been officially accepted by Wyatt, said earlier that he was confused over the separation of powers between the department's paid fire chief and the volunteer fire chief. The council recently amended the fire and rescue services ordinance to better define the two jobs within the 97-member squad.

"My resignation was not put in as a threat in any way," Dailey said.

"I had already resolved the situation with my wife and myself and was looking forward to getting on with my life and looking for a job."

Dailey said he had planned to send his resume to private companies to be considered for management-level positions. Wyatt said he worked to persuade Dailey to stay on the force while private meetings were held in the past few weeks.

"I know the fact that I never accepted his resignation was a little queer, but I left the door open for him" to reconsider, Wyatt said. " Dailey now feels like the working environment will be more conducive to what he feels he needs to carry out his job," Wyatt said.

Dailey, a 20-year veteran of the Fairfax City fire department, earlier told the council and the city manager that the old fire ordinance "was ambiguous -- you just couldn't tell where authority started and stopped."

Since the council revamped the power structure in the force, Dailey said, there have been "favorable changes in the morale" of the volunteer and paid firefighters.

In other matters, the council:

* Approved a plan to add a turning lane on Chain Bridge Road (Rte. 123) between Commonwealth Hospital and City Hall.

James Shull, public works director, said the addition of a third lane to one of the city's most congested thoroughfares would help alleviate traffic jams along the north-south road.

Shull said cars usually are forced to weave around other vehicles turning left or right off the busy two-lane stretch. The $150,000 project is scheduled to begin in late spring.

* Approved a rezoning application for Gary P. Grimm Inc., to rezone four residential acres on the eastern edge of Fairfax City for a town house-style office complex. The $10 million development, to be located opposite Fair City Mall, will consist of six structures, each containing 27 two- or three-story town houses. The complex will have 80,000 square feet of office space.

Bob Anderson, construction project manager, said there are four single-family homes on the property.

He said the developer already has met with the landowners and agreed to buy the property.