The D.C. Council, eager to promote residential development downtown, is contemplating a change in the building-height limit that critics say might threaten the city's skyline and thwart an 80-year-old law passed by Congress.

The council tentatively agreed yesterday to adjust height restrictions to allow a combined residential-commercial development, part of the Market Square North complex planned near the the FBI Building on Pennsylvania Avenue, to rise 130 feet above street level.

If the adjustment is enacted, it would mark only the second time in history that the council has recommended a specific departure from the 1910 federal law that restricts building heights in the District. The development, bounded by Ninth, D, E and Eighth streets NW, is planned by Square 407 Limited Partnership, whose principals include Kingdon Gould, a parking lot magnate.

Generally, buildings in the city can be no higher than the width of the street on which they front plus 20 feet. Buildings in commercial zones are limited to 130 feet, but can go higher in certain restricted areas along Pennsylvania Avenue. The only project off the avenue that has received an exemption since the District received home rule is Metropolitan Square, a 130-foot mixed-use development at 15th and G streets NW.

Council members Betty Ann Kane (D-At Large), Jim Nathanson (D-Ward 3) and William Lightfoot (I-At Large) argued against the Market Square North change, which passed by voice vote within the Committee of the Whole. The amendment will be placed on the full council's regular agenda next Tuesday.

At issue during yesterday's meeting was whether the council had the authority to make the change for the project, whose plans include 201 residential units, 394,000 square feet of office space and 27,000 square feet of retail space.

Attorneys for the council and the city said yes. The U.S. Department of Justice and the National Capital Planning Commission have sent letters to the council arguing that the city does not. The Pennsylvania Avenue Development Corporation, a federal agency under which the site is being developed, said the city does.

But having the authority to make the changes would not make it right, the amendment's detractors said yesterday. Lightfoot warned his colleagues about "changing the character of our city" by allowing the building to force "its identity on the site."

Nathanson said the goal of increasing tax revenue by creating luxury housing does not justify the change. "If we start doing this in the name of creating housing, we're setting ourselves up . . . for creating other 'canyons,' " he said.

Council Chairman David A. Clarke (D), however, took issue with the idea that the height restriction change, in this specific case, was a "bad precedent" or "aesthetically" wrong.

The Market Square North development would be "harmonious" with the existing landscape, Clarke said. The FBI building is 160 feet tall, permissible under the provision of the law covering buildings that front on Pennsylvania Avenue. Buildings east of the planned development are 110 feet.

The Committee of the Whole also approved without discussion procedures to allow redistricting of election wards and advisory neighborhood council areas based on changes found in the U.S. Census.