D.C. school officials said yesterday they will ask the D.C. Court of Appeals to put into escrow the $10.8 million Mayor Marion Barry wants to cut from their budget.

The officials' maneuvering came a day after a three-judge panel of the D.C. Court of Appeals issued an order prohibiting the school system from spending the money, which has been the subject of a legal battle since the mayor announced he wanted to cut the school budget.

The courts have yet to consider the merits of the school system's lawsuit, which contends the mayor does not have the authority to order the cut. But school officials now are concerned that if a court doesn't rule on that issue by Sept. 30, the end of the city's fiscal year, the unspent money would automatically revert to the city no matter who is in the right.

Shortly after the mayor announced the cut, school board President Nate Bush (Ward 7) said that the system had no choice but to furlough teachers for several days without pay to comply with the order. But yesterday Bush all but ruled out furloughs.

He said board rules require that workers get 30 days' notice before being furloughed. If notices were issued yesterday, he said, that would ultimately provide only one day of payroll savings, not enough to meet the cuts.

"I don't believe the {school} board will try to waive the rules to furlough employees," Bush said.

Instead, officials said, vendors who provide such things as textbooks, supplies and food for lunch programs will go unpaid until after Oct. 1.

School system officials said there was $60.5 million remaining unspent in the current half-billion-dollar budget. Of that amount, $51.5 million is earmarked for payroll, $9 million for outstanding purchase orders.

Delabian Rice-Thurston, executive director of Parents United, a school advocacy group, called the prospect of the system losing $10.8 million horrifying.

"I can't tell you how horrible that loss of money is for a school system that is really struggling to improve itself," Rice-Thurston said.

The school board sued to stop Barry when he announced in July that he wanted to cut the school funds as part of a broad spending cutback. This month, a D.C. Superior Court judge ruled that Barry's attempt to cut the school budget was invalid because he did not seek D.C. Council approval. His failure to do so, the court said, violated a 1983 agreement with the school board.

The city appealed that ruling. The order Monday from a D.C. Court of Appeals panel sets the stage for a full hearing on the matter. The school board will ask for that hearing tomorrow, the same day it requests that the $10.8 million be placed in escrow.