Maryland officials said yesterday that they have abandoned a proposal to sell $400 million in bonds to speed repayment to savings and loan depositors whose funds have been frozen for two years.

The plan, engineered by Lt. Gov. Melvin A. Steinberg, would have allowed 21,000 depositors at two S&Ls now in state receivership to recover their money by the end of this year, two years ahead of the 1989 deadline pledged by the state.

Steinberg and Gov. William Donald Schaefer told top state officials yesterday that they have scrapped the bond plan because a number of economic uncertainties could limit its chances of success. Chief among them are rising interest rates and a concern that a $400 million bond issue could cost the state its coveted AAA bond rating.

"The proposal is off the table," said Steinberg, adding that he and Schaefer remain committed to their campaign promise of trying to find a way to provide early repayment to Old Court and First Maryland savings and loan depositors. "We're not sorry we tried," said Steinberg, who has devoted much of his five months in office to the project.

"Oh, man alive! This just blows us out of the water," said William Schmidt, head of a committee of First Maryland depositors working toward the accelerated payout.

Bert Kozlowski, cochairman of the Maryland Savings and Loan Depositors Committee, had also been closely monitoring the progress of the bond sale plan. "I'm not surprised, but I am disappointed," said Kozlowski yesterday after learning that the plan had been dropped. "I'm sure many, many depositors are also disappointed."

Steinberg delivered the news that the administration was abandoning the bond sale to legislative leaders and representatives of New York bond rating houses during a Chesapeake Bay cruise on the Maryland Independence, the governor's yacht. The bond representatives had traveled to Maryland to discuss the state's AAA bond rating, undergoing its annual review.

Schaefer and Steinberg decided late Wednesday that there were too many unanswered questions to go forward with the bond sale, according to a spokesman for the governor. One of their fears, he said, is that the state would not be able to raise enough money from the sale of Old Court assets to make a $188 million debt service payment in 1988.

Officials who attended the shipboard session said that Steinberg promised he would continue to look for other ways to free funds for depositors. One of the best hopes at this point for the estimated 6,000 First Maryland depositors would be the sale of the institution, which the state has been trying to negotiate with John Hanson Savings and Loan.

Currently, the state is trying to raise funds to repay depositors by selling off the assets of the two defunct S&Ls. The bond plan was designed in part to give the state more time to get a better price for those assets, which consist primarily of mortgages and real estate projects.

Two weeks ago the bond plan cleared a major hurdle, with three foreign banks agreeing in principle to participate. But administration officials were worried that increasing the state's legal indebtedness so greatly would jeopardize the AAA bond rating, a concern voiced loudly by skeptics in the General Assembly who would have to approve the plan.

AAA, held by only six states, is the highest rating for government bonds. If the bond rating is reduced, the state is obligated to pay a higher interest rate when it borrows money.

The bonds would have been sold to investors in the private market, and the proceeds then used to pay back depositors at a discounted rate. State officials calculated that most depositors -- who are not now garnering interest on their funds -- would find it to their advantage to accept 80 to 85 cents on the dollar this year, rather than waiting until 1989 for the full amount in their accounts.

However, the cost of the plan is pegged to interest rates, and with those rates rising, state officials concluded that they might not be able to offer depositors even as much as 80 cents on the dollar.

"We think that economics are moving against us," said state Budget Director H. Louis Stettler III.

"There's a feeling that it has to be a minimum of 80 {cents}. You need good participation to make it work, to make it worth the whole effort," he said.

Even more essential to getting the plan off the ground would have been cooperation from the legislature, which would have had to be called into special session this summer to approve it.

But legislative leaders made it clear that without a solid commitment from bonding houses that the AAA rating would be preserved, they were unwilling to even consider the plan.

"The thing the depositors have is a commitment from the administration to try to find other alternatives," said Stettler.

"It's a commitment from people who have tried."