School Superintendent John A. Murphy's pledge to leave Prince George's County has generated widespread concern that his departure will stall educational improvements, if only temporarily, and hamper the county's efforts to use education as a lure for new businesses.

Murphy on Tuesday was named one of three finalists for Kentucky's top education post and announced that he is actively looking for a new job. "It is a foregone conclusion that I will leave Prince George's soon," said Murphy, who acknowledged that he is being considered for other undisclosed school leadership posts.

Murphy's decision to leave comes at a time when school officials are grappling with several prickly issues, including a $10 million deficit, the disproportionate failure rate of black male students, and discontent about the gap in funding and quality between magnet programs and non-specialized schools. Demographic shifts also have forced school officials to question the relevance of a court-ordered desegregation plan when the student population is now two-thirds black and growing.

"Our school system is poised in a very delicate position where effective advocacy is crucial to longtime health and vitality," said Wayne Curry, president of the Prince George's Chamber of Commerce and chairman of the school system's Committee on Black Male Achievement. "I don't currently see someone here who could effectively marshal the forces necessary to weather this difficult period."

Several politicians and business leaders expressed concern that businesses, homeowners, and even applicants for Murphy's job might overlook Prince George's if the school system's image begins to erode.

"Who is going to want to come here and be superintendent when you look at all the controversies we've had in the past year," said developer and banker Raymond LaPlaca, referring to the uproar over the school board's efforts to dissuade Murphy from leaving in February by increasing his salary by $45,000 and extending his contract until 2000.

"If we don't find someone of {Murphy's} caliber, it is going to be a disaster," LaPlaca said. "There used to be a time when businesses would say, 'Put your warehouses there but don't put your executives out in Prince George's County because the school system stinks.' Murphy helped to reverse all that."

But some say Murphy has been erroneously painted as a panacea for the county's image problems.

"It's crazy to say that the county is going to sink if Murphy leaves," said Senate President Thomas V. Mike Miller Jr. (D-Prince George's). "No one is irreplaceable. It will be a sad day when John Murphy leaves, but there are other John Murphys out there who are ready, willing and able to do the job."

School board members were reluctant to talk about efforts to replace Murphy before he leaves. But most acknowledged that his departure could harm the school system.

"This is probably the worst time for him to leave," said school board member Marcy C. Canavan. "We are dealing with so many tough issues that we need some stability now more than ever."

Murphy came to Prince George's in 1984, and has been credited with taking a system that had long been plagued by dismal student achievement and employee malaise and making it a national model for education revisions. In recent years, the school system received widespread recognition for posting a 20-point gain in standardized test scores and creating a magnet school program that offered specialized instruction in areas ranging from performing arts to science.

He also became a darling of the business community, striking up partnerships with companies to tackle tasks from buying computers to hiring teachers. In return, Murphy vowed to improve the quality of graduates and enhance the county's image through a public relations campaign that created a slogan for the school system: "Good things are happening in Prince George's County."

But some say Murphy, in his zeal to promote education improvements, overlooked problems such as lagging black student achievement and the relative dearth of supplies at neighborhood schools.

"Some would say you have to oversell to make believers. But at the same time they were hyping all these improvements they were sweeping other problems under the rug," said state Sen. Albert R. Wynn (D-Prince George's). "They would sell test score improvements without looking at dismal grade point averages. It's two different dynamics and the school system chose to highlight one and ignore the other one when it was out on its initial P.R. blitz."