Mayor Marion Barry told D.C. Council members yesterday that he might cancel a controversial $216 million lease for an interim District Building if council members go along with his proposals for reducing a budget deficit that could reach $90 million this year, according to sources.

Barry made the offer during two-hour closed-door meeting with council members to discuss the city's mounting fiscal crisis.

The emergency meeting followed a report that the Barry administration may have to furlough city employees to meet payroll and other financial obligations this summer.

Barry and council leaders, including Chairman David A. Clarke (D) and John A. Wilson (D-Ward 2), chairman of the Finance and Revenue Committee, discussed a series of options advanced by the administration, including furloughs, a tax on public utilities and cancellation of scheduled pay increases for 10,000 nonunion workers.

Sources at the meeting said the participants also discussed the possibility of rescinding plans to cut the property tax rate for homeowners.

After Barry and his aides outlined their proposals, sources said, council members angrily complained about what they termed wasteful spending and actions that suggested a lack of commitment to reducing the deficit.

Council members have questioned the administration's decision to enter into a 20-year lease, at a cost of $216 million, for temporary offices for the mayor and council while the District Building is under renovation between 1991 and 1994.

The lease for a yet-to-be constructed 10-story building at 800 North Capitol St. NW was the most expensive proposal considered by the city government, and was awarded to a group that includes lawyer Richard A. Bennett Jr., a major Barry campaign contributor.

According to a council source, Barry told the members, "If I see some movement in our direction {on the budget}, I might be willing to talk to the people about getting out of the lease."

Several council members told Barry they wanted the city to cancel the lease regardless of the outcome of the budget negotiations, according to sources.

Barry told the council members he had taken steps recently to reduce spending, and cited as an example his cancellation of a planned trip to Senegal by Wylie L. Williams Jr., deputy mayor for economic development, and Teri Doke, secretary to the District of Columbia.

The only decision reached at the meeting was to form a joint executive-legislative task force to study the problem over the next week or so.

Barry and City Administrator Carol B. Thompson declined to discuss the substance of the meeting with reporters and canceled a press briefing.

"We had a good discussion," said Wilson. "We're going to have another discussion . . . . I don't know what's going to happen."

The budget meeting was called by the mayor to discuss what Thompson described in an interview with The Washington Post this week as a worsening financial situation for the city.

Tax collections have fallen behind city projections by about $28 million, and the Department of Human Services and other city agencies have been spending far in excess of their budgets.

Human Services, a gigantic department that operates mental health programs, public clinics and shelters for the homeless, is overspending its $700 million budget by about $40 million, council members were told.

The city's overall operating budget is about $3.2 billion.

Officials also are concerned that the government's cash reserves are so low that there may not be enough money this summer to make a number of payments that are due, including a $30 million payment to Metro in July.

One idea floated by the administration, furloughing D.C. government workers, drew a decidedly chilly reaction yesterday from representatives of public-employee unions and some council members.

David J. Schlein, a top official of the American Federation of Government Employees, said it was a "lousy idea . . . . They're not going to be able to solve the problem by doing furloughs."

Schlein also expressed anger that Thompson discussed the possibility of furloughs in an interview with The Washington Post this week before notifying union officials. "I'm outraged that they would even think of doing this without informing the employee representatives," he said.

Sources said the administration told council members that at the current rate, the District would overspend its budget this year by $90 million, and that a furlough would save the city only $4 million to $5 million.

In fact, the proposals outlined by the administration would reduce the deficit only by about a third, sources said. It was unclear where the rest of the saving would come from.

By law the city must end the year without a deficit, but there is no way of enforcing that regulation. The city ran a deficit of about $14 million in 1988, and reported a small surplus in 1989.

Three members of the council are running for mayor, and most of the other members are seeking reelection. Most have been trumpeting their recent steps to clear the way for a 7-cent reduction in the property tax rate of $1.06 per $100 of assessed value. Many are reluctant to retreat from that action.

"Some people don't want to do anything but politically posture, but the majority want to solve the problem," said Wilson, who is running for council chairman.

Some council members also are skeptical of the administration's figures, according to several sources. In the past, they noted, the administration has issued dire warnings about the budget and then found extra revenue towards the end of the fiscal year.

A spokesman for Clarke, a mayoral candidate, said Clarke is not ready to accept the mayor's figures until he receives documentation on how money is being spent.