District school officials have developed a plan to dramatically reorganize four Capitol Hill schools to expand programs that have attracted middle-class children.

Under the plan, dubbed "Schools on the Hill," Stuart Junior High School now with grades 7 through 9, would close in June and reopen in the fall as the Hobson Middle school with grades 5 through 8.

The plan also calls for both Peabody and Watkins elementary schools to house classes for prekindergarten through fourth grade. Peabody currently has prekindergarten to third grade and Watkins has prekindergarten to sixth grade. The new middle school is designed to serve only students from Peabody and Watkins.

The proposal, now requiring only the formal approval of D.C. School Superintendent Floretta D. McKenzie, who has already voiced her support, was initiated by parents with children in the Hobson-Peabody program and Ward 6 school board member Bob Boyd, more than a year ago. The plan's supporters said it would:

*Create a permanent home for Hobson, now housed on the fourth floor of the Watkins building.

*Eliminate overcrowding at Peabody.

*Provide space for a new science and arts center, which will offer special after-school and summer programs to be housed at Watkins.

"The plan affords us an opportunity to improve the educational process for all the community residents," McKenzie said through a spokeswoman. "And this process has allowed parents to closely participate in the development of a plan that will benefit all the students in that community."

All four schools are on Capitol Hill, an area generally located between the U.S. Capitol, the Anacostia River, H Street NE and K Street SE. The community is laced with large two- and three-story turn-of-the-century homes that have become popular addresses for young middle-class professionals in the past 20 years.

Peabody Elementary, at Fifth and C streets NE near Lincoln Park, now has a student body that is almost racially balanced, with 157 black students and 127 white students, according to school figures.

Its students usually score above national norms on standardized tests.

Watkins, which is located a few blocks east at 12th and E streets SE, has 350 students -- 342 of whom are black. Hobson Middle School has 151 students and is overwhelmingly black.

In the past few years city school officials have tried to design programs to keep middle-class students in the public schools after sixth grade. The city's junior and senior high schools are generally held in low esteem and many middle-class parents put their children in private or parochial schools to prepare them for admittance to some of the country's best colleges.

A majority of the Peabody-Hobson parents appear to support the reorganization proposal, but a minority is unhappy with the plans.

"They won't come out and tell you but some parents are opposed to the present plan because of racial reasons," said a Hobson parent who asked not to be identified. "They did not want their Peabody/Hobson children to be forced with the children now at Watkins and Stuart."

Boyd said, "There were some parents who did not want Watkins included in the plan. But we said no to that notion because we did not want to create that kind of exclusive environment."

The merger of students from Stuart, Watkins, Peabody and Hobson "will make up a wide range of students coming from all types of backgrounds, poor, rich, white, black and the whole bit," Boyd said.

"I'm taking my kid out of Peabody in September and putting him in Watkins because I am confident that Watkins will be just as good a school for him as Peabody," said Sharon Raimo, whose son now attends Peabody. She said she thinks other parents will also transfer their children.

"Once you have the same staff, same administration, same programs, then essentially you have the same school also," said Raimo, who does not think that Watkins will be inferior to Peabody as some parents have charged.

Stuart was chosen to become a middle school because of its declining enrollment. Stuart, at Fourth and E streets NE, with 232 students has the smallest enrollment for any junior high school in the city.

Stuart students who will be eighth graders in the fall will continue at the school. But ninth graders and incoming seventh graders will have to select another junior high.

Phillip Johnson, vice president of the Stuart PTA, said he was very concerned that under the current plan the new Hobson Middle School would only be open to students attending Peabody and Watkins.

"If it is to be a true merger, and the new innovative and creative programs at Hobson come to Stuart, then we want our neighborhood children to have the option to participate," Johnson said. "We will fight this to the end."

He also noted that building repairs such as roof work and painting, which the PTA had long requested, are now being done. Johnson said he thinks it's because of the plan.

Other elementary schools in the area, such as Brent, Goding and Ludlow-Taylor decided, not to participate in the new plan, preferring to remain traditional elementary schools.

Hobson students will attend ninth grade at Eastern High School, 17th and East Capitol streets. A ninth grade was added at Eastern last September especially for the Hobson students.