The District government and the National Park Service said yesterday they are scrapping plans for turning the USS Williamsburg, a former presidential yacht, into a floating restaurant, but are close to an agreement with developers to allow a smaller restaurant boat to dock along the Georgetown waterfront.

Under the proposal, which is still being worked out, developers would custom-build a 200-seat restaurant boat instead of converting the Williamsburg to a 500-seat dining facility.

The scaled-down proposal appears to have blunted opposition from Georgetown residents, who have been concerned that a floating restaurant and other development along Georgetown's Potomac River shoreline would mar a planned waterfront park between Rock Creek and Key Bridge.

"They've abandoned the large ship idea and gone back to the original plan calling for only 200 seats," said William Cochran, an architect who is chairman of the Georgetown Advisory Neighborhood Commission.

John Laytham, an owner of Clyde's restaurant and a developer of the floating restaurant, confirmed yesterday that the Williamsburg no longer is being considered to house a restaurant, at least in Georgetown.

"I think the final result is an attempt to satisfy everyone's needs -- the city and the park service -- and to meet the objections of the citizens," Laytham said. "It's nice to see that."

Sarah Campbell, federal affairs director for the city's Department of Public Works, said, "I'm very positive about the prospects for having a restaurant boat on the waterfront."

The smaller floating restaurant will be docked between 33rd Street NW and Key Bridge. The developers expect to use the city's old motor vehicle impoundment lot temporarily for parking and eventually to use off-site parking, according to officials.

Georgetown residents had been particularly upset by proposals to use 2.6 acres of waterfront property for both underground and surface parking for the restaurant.

Campbell said it probably will take another six weeks before a basic agreement is set between the city, the Park Service and the developers. The District, she said, is negotiating a final lease for docking rights, and the Park Service wants to ensure that certain improvements are made to the park area by the developers before giving final approval to the agreement.

Revised development and leasing costs have yet to be worked out. The final price tag, however, is expected to be considerably less than $12 million, the estimated cost of restoring the Williamsburg and providing parking facilities at the proposed site.

The Williamsburg, a one-time gunboat used for a yacht by President Truman and on which jhe played poker regularly, is now anchored near the Blue Plains sewage treatment plant. One of its owners, Stuart J. Long, said yesterday the "ship goes with the development deal" since the Williamsburg owners have had right of entry to the Georgetown dock since 1977.

Long said the Williamsburg probably will be restored by someone else and resold.