ANNAPOLIS, FEB. 18 -- Gov. William Donald Schaefer, bowing again to opposition to a planned budget cut, has decided against eliminating state welfare benefits to thousands of temporarily disabled individuals, officials said today.

Schaefer's proposal to save millions of dollars by tightening eligibility requirements in the state's General Public Assistance program had come under siege from poverty advocates, who said the governor was targeting the poorest of the poor.

General Public Assistance is available to temporarily disabled people who do not qualify for other welfare programs, such as Aid to Families With Dependent Children. The program's average monthly stipend is $205.

Maryland is one of the few states to offer such financial help, and activists urged legislators not to let Schaefer weaken that social safety net.

In a joint appearance today before a legislative review committee, state Budget Secretary Charles L. Benton Jr. and House Appropriations Committee Chairman Charles J. Ryan (D-Prince George's) said the state will find a way to underwrite a $10 million deficit in the assistance program this year without denying any benefits.

"I don't think this will be revisited," Ryan said, referring to Schaefer's initial proposal.

The state also will fully finance the program next year, when the number of public assistance cases is expected to continue growing, Ryan added.

The General Public Assistance rolls are expected to top 25,000 in the coming year, the highest in a decade.

Schaefer had wanted to deny benefits to some 6,000 to 8,000 applicants whose disabilities last fewer than six months, a move that with other changes could eventually save the state government more than $20 million annually.

Ryan said at least part of the money can be offset by diverting General Public Assistance applicants who have the AIDS virus into federal disability programs, which Ryan said have become more liberal in reviewing such cases.

"A careful analysis of our caseload and careful budgeting may obviate the need" for any reductions, he said.

Schaefer's reversal on the public assistance program marked the fourth time in recent weeks the governor had called for cuts in politically sensitive programs, and then backtracked under legislative and public pressure.

The administration, which has had to cut $423 million from its 1991 budget, has restored funding for kidney dialysis services and youth camps, canceled the planned layoffs of 1,800 state workers and scrapped a plan to force tens of thousands of others to work longer hours.

The Schaefer administration also has opened talks with local volunteer groups in an attempt to restore some public park services targeted for cuts.

At today's committee meeting, legislators suggested that if Schaefer was hoping to build support for a proposed tax increase by offering such controversial cuts, he would not succeed.