The threat that the District's popular Latin American Festival would be canceled for the first time in 20 years ended yesterday when organizers gave the National Park Service a $35,000 deposit.

With fewer than five days to spare, the festival organizers and National Park Service officials came to terms for holding the annual celebration on the grounds of the Washington Monument Sunday, said Sandra Alley, a spokeswoman for the Park Service.

"It took everything we have," said festival President Arturo Griffiths. "It's going to put our budget in great strain, but we'll try to work out the other details."

For the past week, the festival was imperiled because the District government, looking for ways to cut spending, had withdrawn most of its funding for the event. At the same time, the Park Service was adamant that festival organizers pay an advance fee of $90,000 to cover the anticipated cost of maintenance and security for the celebration.

But a compromise was reached Tuesday when festival organizers and officials from the Park Service agreed to scale back the size of the event and end it earlier.

Sunday's festivities will begin with an 11 a.m. parade on Constitution Avenue, from Third Street to 15th Street NW. The city, which withdrew its support for a Saturday celebration in Adams-Morgan, will absorb the cost of the parade, Griffiths said.

Then, beginning at 2 p.m., a dozen bands will perform at either the Sylvan Theater or another stage that organizers will construct. Originally, the organizers had planned for four stages.

Among the highlights of this year's entertainment will be performances by singer Ruben Blades, of Panama, as well as Luis Enrique, from Nicaragua.

Two hundred booths will be set up near the parking area just west of the Washington Monument, Alley said. Originally, there was a plan for two vending areas.

Finally, Sunday's event will shut down at 6:30 p.m., 90 minutes earlier than first planned.

Organizers said they will have a small musical performance on Saturday on the grounds of the Marie Reed Learning Center in Adams-Morgan, Griffiths said. This will last from 1 to 6 p.m., and no vending will be allowed.

The move to scale down Sunday's celebration will drop the Park Service's cost to $46,000, Alley said, and the federal government will absorb $11,000 of it.

Negotiations between festival organizers and Park Service officials seemed at an impasse until Tuesday. While the organizers agreed at the beginning of the week to downsize the festival, they still believed the cost estimates the Park Service provided were inflated.

So festival organizers appealed to Interior Secretary Manuel Lujan Jr., who oversees the administration of all federal lands.

Steven Goldstein, a spokesman for Lujan's office, said the secretary was looking for ways to cut costs, but remained adamant that the organizers pay at least $35,000 when he found out that they had spent $35,000 to retain a private consultant, Creative Associates International, to enlist corporate sponsors for the event.

"This is a normal way of doing business," Griffiths said of the consultant. "We're not doing anything irregular."