The Montgomery County Board of Education, squeezing money from an already-strained budget, voted last night to abolish interscholastic sports in middle schools and to virtually eliminate driver education.

The board made the cuts as it adopted a $762 million operating budget for 1991-92 that complies with orders from Montgomery's political leaders to recognize the county's financial crisis.

In all, the school budget is $20 million less than the $782 million spending plan recommended last month by Superintendent Harry Pitt. But despite the unprecedented reductions, the board did not approach the $70 million that County Executive Neal Potter has warned the school system it probably will need to cut.

Board members said last night that they may need to carve more deeply into school programs that have been viewed as untouchable, by means that could include increasing class sizes and eliminating the seventh class period from high schools.

Members appeared acutely aware that cuts they have made so far are likely to provoke protests from students and parents. "They are not going to like it," said School Board President Blair Ewing.

"This is a good program and an important program," Ewing said before the vote to abandon the six interscholastic sports in which about 4,000 middle school students take part.

"I haven't changed my views about the value of the program, but the circumstances have changed. This is a close call, but we are looking for those cuts that do the least possible harm to the classroom."

Trying to blunt the impact of the cut, the board decided to expand intramural sports at the county's 21 middle, junior high and intermediate schools. But the board's student member, David Chang, said that was unlikely to appease students preparing for senior high varsity sports.

Board members also said they expect a hostile reaction to their decision to severely curtail driver education for high school students.

Currently, Montgomery is one of the last school systems in the Washington area still offering an elective driver education course for credit during the school day, and nearly 5,000 students are enrolled this year. School officials said the cuts will mean that driver education will be available to only 1,200 students, who will have to pay tuition and take classes not-for-credit at night.

The board also decided last night to abandon swimming classes for fourth-graders, outdoor-education "I hope now the council will . . . programs for eighth-graders and two-thirds of the county's small grants for efforts to help minority students.

"This board has made very major cuts. I know of no other board that has ever had to do such a thing," Pitt said after midnight when the board took its final vote. "The message I want to deliver is, I hope now the council will recognize that and move part of the way."

The cuts are a jolt to a well-regarded school system that traditionally has been a prime budgetary priority among Montgomery residents and political leaders. But this year, as the county faces a tight economy, Potter has asked for dramatic reductions in the budget recommended by Pitt.

A week ago, the board made an initial round of cuts, carving $18 million from Pitt's proposal, which would have paid for modest initiatives and helped to absorb about 5,000 new students next year.

During the 8 1/2-hour session last week, board members reluctantly abandoned more than three-quarters of the $4 million initiative.

The board eliminated plans to create more all-day kindergarten classes, hire extra elementary school counselors and reduce the size of elementary school classes.

It also pared $14 million in ways seen as likely to erode current services.

The board voted to eliminate one of four area offices, a major change in the organization of the sprawling, 103,500-student system.

The cuts also include a 50 percent reduction in field trips, a 5 percent reduction in central administration and curtailment of school maintenance and the number of employees working during the summer.

Board members voted to buy fewer school buses than expected, forcing schedule shifts for some elementary school students.

Last night the board changed its mind on one of the few additions it had made a week ago to Pitt's proposal, reversing a decision to hire a staff analyst who would have worked for the board itself.