The federal government filed suit yesterday to reclaim a one-block stretch of Eighth Street NW that the D.C. City Council had given to the developers of the planned Techworld center, creating a legal round robin over the controversial and often-delayed $300 million project.

The government's suit, the third filed in the last two months over the construction of Techworld, also asks that developers be made to shave 20 feet off the planned height of the two-square-block project.

The outcome of the legal battle -- which includes the District government, preservationists, some D.C. officials and two planning agencies -- should decide if the massive trade mart and hotel will be built, and it could affect commercial development in some areas of downtown Washington.

"It is unfortunate that the federal government would see fit to challenge the basic home rule authority of the D.C. government," said Techworld project manager Jim Roberts.

The administration of Mayor Marion Barry, which has strongly backed the Techworld project and orchestrated the process that gave the block of Eighth Street between I and K streets NW to Techworld, referred questions about the suit to the city corporation counsel, who did not return telephone calls.

The federal government said home rule is not the issue, that instead it goes back to Pierre L'Enfant's 1793 plan for the city.

The D.C. Preservation League says its case and the government's are rooted in an 1864 statute that was passed because of a foul-smelling open-air market that was operating illegally in Mount Vernon Square, which is immediately north of the Techworld site.

At the center of the controversy stand Watergate developer Giuseppe Cecchi and his Techworld, which would occupy most of the area bounded by Seventh, Ninth, I and K streets NW. The tract, which developers put together at a cost of about $73 million, is adjacent to the Washington Convention Center.

Announced in December 1983, the development -- to include 700,000 square feet of office and display space, 150,000 square feet of showrooms and an 800-room hotel -- would be the largest private real estate development in the city. A principal feature is a six-story, glass-enclosed bridge that would join its twin towers and span what was Eighth Street.

Since its announcement, Cecchi has said he would have to have special concessions to obtain financing for the project and for it to be profitable. Key among those was the section of Eighth Street NW between I and K streets.

In November 1984, the City Council passed legislation permitting the block-long stretch to be closed and the land to be given to Techworld.

Among the concessions sought by Cecci was city Zoning Commission approval to build a larger structure than usually allowed on a site its size. But by last August, negotiations among Techworld's developers, the city and planning and preservation groups had broken down and Cecchi said he would live within the restrictions normally imposed on such a site.

But Cecchi's decision did not end the controversy, and in February Techworld filed suit against the District, the D.C. Preservation League and the Committee of 100 on the Federal City seeking to settle the legal questions over the ownership of the 900 block of Eighth Street and the height requirement.

On the same day, the Preservation League and the Committee of 100 filed suit against Cecchi's main firm, International Developers Inc.; Barry; the City Council; several District officials; the National Capitol Planning Commission and the secretary of the interior. That suit asked the interior secretary to reclaim Eighth Street under the 1864 law, which directed the secretary to reclaim streets and federal land that had been taken improperly.

The suit filed yesterday by the Justice Department on behalf of the Interior Department and the National Capitol Planning Commission is against Techworld and the District government. The federal government claims that it was the owner of the 900 block of Eighth Street and that it wants it back.