Responding to a massive campaign by animal rights activists to ban horse-drawn carriages in the District, the D.C. Council approved a bill Tuesday that would allow the carriages to remain but would effectively close one of two carriage companies in town.

The vote came three days after police arrested the owner and the manager of Wheels Across Washington, the firm that likely would close if the bill becomes law.

Police charged the two operators with cruelty because they did not have the horses in a shelter the night of the arrests. Jean Johnson, executive director of the Washington Humane Society, said animal cruelty laws require minimal shelter, but offer no standards for the care of hansom-cab horses and are difficult to enforce.

The new bill, which would require approval by the mayor and Congress, includes stipulations that horses not work when the temperature exceeds 89 degrees and not work more than 12 hours in a 24-hour period.

"It goes a long way in improving conditions of carriage horses in the District," Johnson said.

But some animal rights advocates criticized the bill as too weak, saying no carriage business should be allowed in the city because it is too hard on animals to pull carriages through congested streets. The activists said they would try to get an initiative on the ballot next spring in an effort to ban the horse carriage trade altogether.

"The council is basically legalizing cruelty to horses in the District," said Cam McQueen, of the People for the Ethical Treatment of Animals.

The new legislation was written with the help of Wheels Across Washington's only competitor, Charley Horse Co., a firm that uses heavy mixed-draft horses rather than the lighter-weight Morgan horses used by Wheels Across Washington. The bill would ban the use of horses weighing less than 1,100 pounds, effectively prohibiting the use of Morgan horses.

Michael Fuller, who owns Wheels Across Washington, says the law is designed to put him out of business. "The District of Columbia and the Humane Society are plotting against me," he said.

Between 1987 and 1989, the Humane Society received 52 complaints from people alleging that horses pulling carriages in the city were being abused. Johnson said most of the cruelty complaints were filed against Wheels Across Washington.

Johnson said complaints charged that the company puts too many people in its carriages and continued to operate when the temperature exceeded 90 degrees. She said she thinks that the company's horses are too small to be pulling carriages and that the firm does not properly rest or water them.

After an investigation, she said, the society filed a complaint charging that the horses are left overnight in a paved lot on First Street SE without shelter.

On Saturday, police arrested Fuller and his manager, Nancy Halstead, charging them with cruelty. Humane Society representatives were on hand for the arrest and confiscated four horses, Johnson said.

Fuller said he wanted to be arrested because he wants to go court and prove that the lot is safe. He said that the lot is a holding pen and that horses are kept there for only a few hours. Besides, he said, horses don't require shelter.

As for the provision of the bill that would ban horses weighing less than 1,100 pounds, Fuller said Morgan horses are strong horses specially bred for pulling things.

Sarah Davies, who owns Charley Horse Co., acknowledged that she helped write the legislation. She said her intent was to save the carriage-horse business in the District by halting the drive for a total ban.

She said carriage horses educate people about "our heritage" and remind them that thousands of carriage horses onced traveled Washington's streets. "Draft horses are bred to pull," she said, "and really enjoy being asked to do the task."