ANNAPOLIS, FEB. 1 -- After wrangling with educators and politicians for months over the best way to improve Maryland's colleges, Gov. William Donald Schaefer's administration produced a thick, complex piece of legislation today to revamp the state's higher education system.

The heart of the bill, which is the governor's top priority this legislative season, is a section that would consolidate 11 of the state's 13 public colleges and universities under one governing board, while vesting new powers in a statewide commission to oversee all facets of higher education.

At the same time, Schaefer is proposing to expand the state's control over Maryland's two dozen private colleges, an attempt certain to encounter their opposition. For the first time, the state could withhold part of its subsidy to a private college if it created an academic program against the advice of the state board or persisted in one the board thought was unnecessary.

"This is a potentially controversial item," Lt. Gov. Melvin A. Steinberg acknowledged today during a briefing to outline the legislation.

He said the greater control is warranted, because Maryland gives the private schools an unusual, direct subsidy that amounts to 16 percent of the aid to public colleges. The state, he says, deserves some authority over how that subsidy is spent.

"This does not add any kind of surveillance on independent institutions," Steinberg said. "It is not unlawful intervening into educational independence."

J. Elizabeth Garraway, president of the Maryland Independent College and University Association, did not return repeated telephone calls today.

However, last week, she said the schools would object to any attempt to increase control over their curriculum. "It really flies in the face of the original intent {of subsidizing private colleges}, which is to balance independence and state authority."

In addition to the new governing method, the legislation includes a plan to help families save money for college, a new way of allotting money to community colleges and a merger of the state's scholarship program -- now run by a separate agency -- with the new higher education commission.

Steinberg, assigned by Schaefer last spring to design the higher education initiative, said Schaefer would consider vetoing any bill that "is decimated in the final product."

The administration is portraying its legislation as a major change of the state's college system that would upgrade the schools' quality through better coordination, clearer roles for each school, the elimination of duplicated programs and bigger state subsidies.

But others today said the proposal would not fundamentally alter Maryland's college system, which was adopted in 1976.

"This is not revolutionary by any means," said House Appropriations Chairman Charles J. (Buzz) Ryan (D-Bowie). "It is evolutionary. I don't expect, if this passes, on July 1 you could walk around the campuses of the state of Maryland and the flowers will bloom everywhere."

While Ryan said he essentially likes the plan, Del. Howard P. Rawlings (D-Baltimore) was critical. Rawlings, who is finishing his own college reorganization bill, said today Schaefer is proposing an "organizational structure . . . .It's not clear it's going to provide the effective management and coordination in this state."

In addition to the greater control over private colleges, the chief differences from the present system include the following:

The five-campus University of Maryland system and a board that governs six other public colleges and universities would be replaced with a new University of Maryland Board of Regents.

Greater control over higher education by the governor, who would acquire the power to appoint the eight U-Md. regents, the seven members of a new Maryland Higher Education Commission and the higher education commissioner.

Broader powers for campus presidents, including some authority to set tuition levels, admissions standards and their schools' "missions."