Falls Church City Manager Anthony H. Griffin, acting on direction of the City Council, told Fairfax County officials Tuesday that the city is no longer interested in selling its water system, which serves about 30,000 households in Falls Church and northeastern Fairfax including McLean, Seven Corners and parts of Tysons Corner.

"The fact that the negotiations just didn't go anywhere indicate that there was not great interest in pursuing them," said Falls Church Mayor Carol W. DeLong, who heads the council. The decision ends almost three years of on-again, off-again negotiations between the jurisdictions.

"I had been hopeful that by working very closely with the Fairfax County Water Authority, we could have purchased the system and eliminated some outstanding difficulties between the county and the city," said Fairfax County Executive J. Hamilton Lambert, who had been told earlier in the day of the city's decision. "If that's not going to happen, so be it."

Fairfax County politicians have complained for some time that the city is able to help keep its real estate tax rate low because of water revenue from county customers. The city's system supplies water to 10,000 of its residents and about 110,000 nearby county residents. The water rate in Falls Church is about 64 percent higher than the rate the Fairfax County Water Authority charges its approximately 800,000 customers.

In the spring of 1985, the water authority offered to buy the Falls Church system for $5.7 million in cash and $575,000 a year during a 50-year period, but the city rejected the offer.

A year later, the city told the county it was interested in negotiating a number of issues, including the possibility of Falls Church's annexation of some county land just west of the city where the city's high school is located. City officials also said they might ask to buy the Whittier School site from Fairfax. In exchange, city officials indicated they might be willing to sell the city's water system to the county.

The city is still interested in boundary adjustments near the western edge of the city where the George Mason Junior-Senior High School is located and in purchasing the 18-acre site of the former Whittier School. While most of that property sits within the city, the parcel is owned by Fairfax County.

City officials have said they would like to have the city's only high school within its borders. Although the city owns the 42 acres on which the school is located, it does not control zoning on the land because it sits in the county.

Griffin said that a factor in the decision not to sell the water system is a change in leadership on the Fairfax Board of Supervisors. He said that during the next 15 years, the city will need to make improvements to the water system, including rebuilding several pumping stations and installing two new water tanks. He said much of the work will need to be done in Fairfax's Dranesville District, which until last November fell under the jurisdiction of supervisor Nancy Falck.

Although Griffin said Falck was not cooperative with the city about the work because she wanted the city to sell the water system, he said new Supervisor Lilla Richards seems more willing to work with city officials.

"She appears willing to listen," he said. "She understands the need of making improvements to the water system. We never got that reception from Mrs. Falck."