Tregaron, an imposing 20-acre estate located just east of the Washington Cathedral, has tentatively been sold for $3.75 million to Rozansky & Kay, the development firm that recently raised a storm of controversy with plans to build 100 houses on the Foxhall Road estate of fomer Vice President Nelson Rockefeller, The Washington Post has learned from several reliable sources.

This second effort by Rozansky & Kay, primarily a suburban developer, to build a huge new development in northwest Washington also promises to be controversial. A lawyer for Washington International School, which occupies the mansion on the estate, said yesterday the school will fight the sale.

Kay McGrath, a citizen activist in the highly organized, highly vocal Cleveland Park community of upper-middle-class residents, was told of the sale by a reporter yesterday. She said, "Oh God."

The tentative sale of Tregaron to a developer, who under current zoning could legally build as many as 80 houses there, again raised questions about what controls the city wants to exercise over major new developments at a time when interest in rebuilding inner-city and close-in neighborhoods has greatly intensified.

In the northwest section of the city, much of this interest has focused on the great old estates that once were the centers of so much social life here. Several developers, for example, are building on the site of the old Glover estate near American University. In the case of Tregaron, its $40,000 annual tax bill was only half met by income from its rental to the school, sources said - a strong argument in favor of selling.

The Tregaron site is close to major roads, mainly Connecticut Avenue, and within a comfortable walk of a future Metro subway stop at Porter Street and Connecticut Avenue. City planner J. Kirkwood White characterised the site as an "in-town location" where cluster zoning that would allow townhouses and preservation of the steep, almost wild terrain, would make sense."

However, White admitted that such zoning would take at least 18 months to obtain. It is thought that if Romansky & Kay goes through with the deal, they will avoid such a time-consuming process and build $225,000 houses on quarter-acre lots as current zoning allows. The surrounding neighborhood mostly contains houses on one-fifth-acre lots.

"It is a site with both steep slopes and trees in the same sense as the Rockefeller estate, a place where a planned residential development which would respect the topography and the vegetation would be preferred," said White.

McGrath, after recovering from her initial shock, said of a possible development of individual houses on quarter-acre lots, "It doesn't sound so terrible on first hearing, although the ideal thing would be to keep that tract with its mansion as an institution or school and the grounds open for free flow - a greenspace."

McGrath said neighbors now consider the school grounds a park in which they freely stroll, picking flowers in the spring. She said she and her group, Citizens for City Living, would oppose any "leveling and building houses, bing-bing-bing."

It is thought that the Rozansky & Kay firm plans to preserve the Georgian mansion on the estate, selling it to a private party and perhaps even to the International School.

Tommy jackson, cochairperson of the Coalition for Planned Environmental Development, a citzens' group that sprang up to fight development of the Rockefeller tract, said his group has prepared and will propose to the city a new ordinance that would strictly limit what a developer could do with a major tract of land in the city.

He said that the ordinance would apply to Tregaron as well as the Rockefeller estate. The ordinance would not necessarily limit the number of houses a developer could build under existing zoning, he said, but would set up a review process aimed at protecting environment features and the surrounding neighborhood.

The sale of Tregaron by a dozen heirs of its late owner, former U.S. AMbassador of Moscow Joseph E. Davies, appears at this point to be far more tentative, however, than the sale of the Rockefeller estate, although neither deal has yet gone to settlement.

According to reliable sources, the contract between the development firm and the heirs, led by former U.S. Sen. Joseph Tydings, Davies' grandson, is in effect simply a 30-day free option for Rozansky & Kay to do engineering and other studies on the heavily wooded, steeply rolling estate to determine if development is feasible. After that the firm has three more months to settle if it decides to go forward with the deal.

In addition, it was learned yesterday that the contract held by Rozansky & Kay continues a clause giving the International School - a bilingual school in large part of children aged 3 to 14 of the city's international diplomatic community - a certain amount of time in which to match Rozansky & Kay's $3.75 million purchase price.

Robert Zimmer, an attorney for the school, claimed that the school already holds a contract to purchase the estate of $2,769 million. He said the contract was singed in January this year by all the heirs to the estate except one. The other heirs, he said, than agreed to sue jointly the one hesitant heir in order to partition the property - which would allow the majority to proceed with the sale.

However, a death and resulting complexities prevented the suit from being filed, Zimmer said. Nevertheless he said, "We think the property is under contract to us." He said he has advised the school to sue.

"I think it's somewhat outrageous for people to agree to sell to the school, then to back off when (some developer) comes through and (wants to) pollute the neighborhood," said Zimmer.

Tregaron was purchased in the late 1940s by Davies, who initially came to Washington with President Woodrow Wilson and then became a trusted aide to Presidents Franklin Roosevelt and Harry Truman. Davies received widespread attention for his role as ambassador to the Soviet Union from 1936 to 1938.

Davies had a Russian dacha, or summer house, constructed on the estate. It was in this relaxed setting that Davies could frequently be found playing bridge with President Truman, Supreme Court justices and other high officials.

"Tregaron" is the name of a village in northern Wales, according to one of the heirs who asked not to be identified. Davies' father, a blacksmith born in Wales, came to the United States in the last century and built one of the first covered-wagon factories in Wisconsin.

Davies died here in 1958 in a receiving line in the mansion at Tregaron while greeting some 7,000 Welsh nationals and descendants.