It's a battle between the nightclubbers and the stay-at-homes, the right to carouse versus the right to peace and quiet. Depending on the outcome, local watering holes may start pushing their cuisine or dropping it entirely.

At issue is the future of District bars, taverns, nightclubs -- not now officially recognized as such under city liquor laws.

In the wake of a D.C. Court of Appeals ruling last fall that threatened to invalidate the liquor licenses of most District restaurants, the D.C. City Council yesterday started its attempt to redesign the city's liquor laws, which have not been substantially changed since the 1930s.

One change under consideration, and already advocated by the chairman of the council committee overseeing the revisions, is to create a category of liquor license for bars and nightclubs, which now have to pretend they are restaurants.

Another, also endorsed by the committee chairman, would limit the number of drinking establishments in some neighborhoods, such as Georgetown, where residents have complained of being overrun by rowdies from the nightspots.

Under current law, an establishment wanting to sell all types of alcoholic beverages must apply for a Class C restaurant liquor license, which requires the business to get most of its income from the sale of food rather than alcohol.

The city's Alcoholic Beverage Control Board (ABC) has long issued licenses to bars and nightclubs as long as they have kitchens and indicate an "intention" to get more income from meals than drinks. But the court ruling last November -- in a suit brought by the Upper Georgia Avenue Planning Committee challenging the licensing of the Shepherd Park Restaurant -- interpreted the law strictly as requiring each licensee actually to get more than half its revenue from selling meals.

The City Council last month passed temporary legislation to keep current liquor licenses intact until it can fashion a permanent law to deal with the issue.

"We are going to have to recognize the fact that we have taverns," said council member John Ray (D-At Large), chairman of the Committee on Consumer and Regulatory Affairs, which started hearings yesterday. "If we're going to have those kinds of places, let's just do it up front."

Mayor Marion Barry's administration opposes this new category, said Donald Murray, acting director of the D.C. Department of Consumer and Regulatory Affairs. Instead, the administration in essence would maintain the ABC's old licensing practice by eliminating the income-from-meals rule but requiring that Class C licensees operate full-scale commercial kitchens.

Murray said the Barry administration opposes a cap on Class C licenses but wants to require that applicants in Georgetown be required to operate a genuine restaurant for 90 days before getting a liquor license, to raise standards there.

Daniel Coleman, owner of The Dubliner restaurant on Capitol Hill and president of the D.C. Restaurant and Beverage Association, said the old ABC standards worked well and the law should be changed to reflect them.