Federal authorities ended a four-year battle with Montgomery County yesterday and conceded that the local officials could go ahead with their preferred route for Great Seneca Highway, a $40 million, four-lane road that would run through Seneca Creek State Park.

The Department of the Interior and the National Park Service, which had been seeking an alternative to the county-sponsored route, said that the county's proposal would cause less damage than alternative routes and the county could begin acquiring the right-of-way for the road.

The 6,000-acre park is owned by the county and the $40 million road is being financed with county funds, but approval of the Interior Department and the Park Service is necessary because federal funds were used to help buy some of the park land.

The two federal agencies, which for four years have scrutinized the placement of the road, said in a letter yesterday that the latest alternative route they had favored linking the highway to Riffle Ford Road, an existing road in the park, would be "unreasonable, due to community disruption."

"This constitutes a go-ahead," said Edgar Gonzalez, a county engineer who met with federal officials in March to press for the road. "What the federal government is saying here is: If the local jurisdiction that knows the parks, owns the parks and manages the parks wants this, we won't hurt you."

Citizens groups that are seeking an appeal in federal court to stop the road construction said yesterday they would continue to pursue their suit.

"The [Interior Department] decision is neither here nor there," said Charlotte Hummon of the Quince Orchard Valley Citizens Association. "We're against any of the routes. We think they should be using existing roads."

Great Seneca Highway, regarded by county officials as a pivotal link in development for northern and western Montgomery County, was planned by the county to siphon traffic from congested I-270 through the park. Under the county's proposal, it would stretch from Middlebrook Road in Germantown to Rte. 28 west of Gaithersburg. Federal officials indicated in their letter that the county's proposal would not be opposed but that the county would have to close Riffle Ford Road at the park boundaries and, in keeping with previous agreements, donate other land that could be added to the park.

"I'm very, very pleased," said county Transportation Director Robert McGarry. "We felt strongly that the [latest route that had been favored by the federal agencies] was unreasonable -- it went through two communities, eliminated 40 houses and would have cost us $40 million more to build."

Great Seneca Highway became the focus of controversy from environmentalists and civic groups in the late 1960s when the county first proposed the road as a way to expand development.

In 1971, the highway was approved as part of the county's master plan and later came to be seen by transportation officials as a necessity as population in the Gaithersburg area grew from 23,150 in 1970 to 67,035 in 1980.

In 1984, the County Council authorized the highway's construction by designating the 7.8-mile road as an "emergency" project that could not be overturned by referendum. That approval appeared to be jeopardized by the Park Service's insistence for the last four years that the county's proposed route for the road would cause excessive damage to the environment.

During the controversy, the county and environmental agencies reviewed 14 sites for the road.