A new slow-growth majority on the Montgomery County Council yesterday began dismantling the development strategies of the last council, killing a policy designed to spur commercial construction.

The council also put off a vote on a proposed countywide tax on new construction after some members expressed concern because it would allow development to proceed in areas where it is now restricted. The tax would raise millions of dollars for critical transportation projects, but the council voted to postpone the issue indefinitely for lack of consensus.

"You can stick a fork in it because it's dead," said Council President Isiah Leggett (D-At Large). "People thought it was more important to kill the symbols out there than pass this tax. Basically what you had today was an exercise in futility."

Council members announced their deadlock shortly before voting 5 to 4 to end Montgomery's "pay and go" development policy just two years after a more pro-growth council approved the idea.

The policy, allowing developers to pay a fee and build projects even in some areas under a growth moratorium, symbolized a new pro-business approach in Montgomery when it was passed by one vote. Its demise underscores the growing clout of the council's slow-growth members, elected last year on promises to undo pay and go.

"This was a case where the council majority that supports balanced, sustainable growth took charge," said council member Philip Andrews (D-Rockville). "Pay and go was eliminated because it puts [the goal of] stimulating development above controlling traffic."

The decision drew a sharp rebuke from County Executive Douglas M. Duncan (D), who called it a step backward in reforming a cumbersome and unpredictable permitting process that he believes stifles growth.

"We have a development approval process that's broken," Duncan said. "Pay and go was passed as a temporary fix until more sweeping changes could be made. Now we're back to where we were. They've gotten rid of the temporary fix and done nothing to come up with a permanent one."

Some council members said the policy failed to live up to its goals. It was supposed to spur commercial development, but resulted in projects totaling only 2.4 million square feet, about the size of a large shopping center. Residential development had been excluded from pay and go by the previous council.

The debate over pay and go and a proposed development tax were part of a broader review of county growth policies for the coming year. For the past few weeks, council members have been wrestling with a policy that would simultaneously encourage development and ensure that it pays for itself.

The centerpiece of the package postponed yesterday was a countywide tax on residential and commercial construction that, when combined with county funds, would raise an estimated $10 million a year for transportation projects.

The tax would charge developers $1,500 to $3,500 for each house or apartment in most cases, and 75 cents to $2 for each square foot of commercial construction. The development community reluctantly accepted the tax proposal because, as part of the package, the county would allow a greater number of projects to move forward.

In addition, the proposal would allow as many as 150 homes a year to be built in each of the county's six planning areas now under moratoriums for residential construction. Developers would have to pay twice the development tax--or about $7,000 a home--to do so. But that part of the proposal doomed any council agreement as pro-growth and slow-growth factions refused to concede the issue.

"Sometimes the light at the end of the tunnel is an oncoming train," said council member Steven A. Silverman (D-At Large), who authored the proposal with Leggett. "We have gridlock about gridlock. The only way there's going to be an impact tax is if there is a reasonable compromise to allow growth."