Mayor Marion Barry and D.C. Council Chairman David A. Clarke tentatively settled yesterday a budget dispute that threatens to delay a proposed police pay raise, but left unresolved a growing political fight over Barry's refusal to disclose plans for handling a budget shortfall this year that could be as high as $192.5 million.

Barry, in a rebuff to Clarke who met with him just before the mayor's regular monthly news conference yesterday morning, suggested to reporters that Clarke was meddling in budget decisions that should be made by the mayor's office. Barry said he will inform the council of budget changes when he submits a revised midyear budget in the spring.

"It's predictable that some members of the council would have different views because that's how it works," Barry said, without naming Clarke. "They just have to find something to differ with us on from time to time."

Clarke said later, "The public has a right to know how the '88 budget is going to be changed prior to its actually being done. I want them to tell me the process by which they are going to deal" with the budget shortfall.

Aides to the mayor said that under the city's charter Barry does not have to reveal specific budget changes and complained that Clarke was using the budget issue to improve his own political standing. Clarke denied the allegation.

Although Barry sounded defiant at his news conference, by midafternoon Clarke said he had talked with Barry again and the mayor had changed his position. According to Clarke, the mayor agreed to send a letter to the council next week explaining his plans for one aspect of the budget revision -- how to cover the $6.8 million needed this year for a 3 percent pay increase for police.

Clarke has been pressing the administration to explain its budget policies in the wake of an October memo in which Barry ordered city agencies to prepare potential budget cuts of up to 10 percent and freeze nonessential hiring.

City officials revealed yesterday that the budget memo, prepared by Budget Director Richard C. Siegel and signed by Barry, caused numerous protests by agency budget officials and has since been modified.

Rather than specific cuts of up to 10 percent, agencies now are being required to review all programs for possible budget cuts with no specific number in mind, according to city officials. The change appeared to be a setback for Siegel, whose attempts to impose sharp budget restrictions have earned him the title "Dr. No."

No cuts for the overall budget have been decided upon yet, although Barry suggested yesterday that the District would not fill personnel slots that have been vacant for two years.

Clarke, in two budget-related hearings since the memo, has said the city faces a shortfall of more than $190 million in its $2.6 billion budget for the year that ends Sept. 30. Barry has said the shortfall is closer to about $106 million but has refused to discuss Clarke's computations.

Barry has said citywide pay raises this year may cost about $66 million and that public safety spending may exceed budgeted amounts by about $40 million. In addition, Clarke has pointed to $20 million that Congress is requiring the city to set aside for the District's longterm deficit, $18 million in additional public safety costs, $39 million in potential federal budget cuts and a drop in sales taxes of $10 million, among other possible problems.

The police pay raise -- worked out in current rounds of collective bargaining with city unions -- will be sent to the council next week. In a hearing Tuesday, Clarke said he may not ask the council to approve the raise until Barry discloses where he expects to get $6.8 million to pay for it this year. Without council action, the pay raise could not take effect until 60 days after Barry submits it.

Barry, at his news conference yesterday, said he will ask the council to give the plan quick approval, but said nothing about meeting Clarke's demand.

"The mayor told me personally {that} he would send me {the letter} within a week," Clarke said yesterday. "If that's the case, the police pay raise may be a nonissue."