Loudoun County and the Town of Leesburg have resolved a dispute that threatened to delay Xerox Corp.'s massive commercial and residential project on Rte. 7 north of Dulles International Airport.

By a 5-to-3 vote the Loudoun County Board agreed last week to allow the Town of Leesburg to supply water and sewer services to a disputed area of more than 200 acres of Xerox land west of Goose Creek.

Philip Ricciardiello, Xerox vice president in charge of the project, said Friday he was "extremely pleased" that the two jurisdictions have come to an agreement.

He said the agreement would allow the company to proceed with the 2,267-acre project, called Potomac Park.

"We are very committed to this project, and now we can move ahead with a marketing effort at the end of this year and the beginning of next year to draw corporate tenants to Potomac Park," Ricciardiello said.

The company plans to build offices for 13 corporate headquarters and 1,830 houses on the Potomac River site during a 10- to 15-year period. Both Loudoun and Leesburg had claimed the right to provide water and sewer services to the area.

In 1972 Xerox signed an agreement saying the county would supply water and sewer services to the land. But 10 years later an annexation agreement between Loudoun and Leesburg gave 7.1 acres of county land to the town and gave the county and town joint approval over which one provides water and sewer service to the 200 acres in question.

In March the town asked a three-judge annexation court to decide whether Loudoun had violated its annexation pact with Leesburg by allowing the 1972 agreement with Xerox to take precedence.

The court dismissed the town's motion two weeks ago, saying that it had no jurisdiction in the matter.

Under the new agreement, Leesburg will provide water and sewer facilities for more than 1,300 acres in the Cattail Branch service area west of Goose Creek, including the 211 acres Xerox owns.

The Loudoun County Service Authority will provide all water and sewer services east of Goose Creek.

Loudoun Supervisor Frank Raflo, who was instrumental bringing the dispute to what he called a "political solution," hailed the agreement as a reasonable compromise that can benefit the town and the county. Raflo, a Democrat representing Leesburg, joined Republicans James Brownell, Andrew Bird and Frank Lambert and independent Steve Stockman in voting for the agreement. Vice Chairwoman Betty Tatum, Anne Kavanagh and Thomas Dodson, all Democrats, opposed the measure