House Democratic leaders have thrown in the towel on efforts to reduce by 70 per cent the amount of money political parties could spend on House election campaigns this year.

The concession means that the issue of whether House campaigns should be publicly financed will become the focus of controversy when the House takes up a campaign financing bill this week.

In announcing that he would offer an amendment to restore the full amount of allowable party contributions, Rep. Frank Thompson (D-N.J.), chairman of the House Administration Committee, said he was doing it "to dispel any concern that the Federal Election Commission bill is too partisan and that it might hurt the chances of a public financing amendment being adopted when the House considers the bill . . ."

Thompson said the "issue is now squarely drawn on public financing" and that he hoped Republicans would "vote to consider the bill, vote for the public financing amendment, and vote for the bill itself - particularly since I am enabling them to have even more than they initially sought."

The bill his committee reported last week would have reduced the amount political parties could spend on individual candidates from $50,000 to $15,000.

The bill infuriated House Republicans, who called it a brazen attempt by Democrats to prevent their party from spending the $18.5 million the GOP has raised for House races this year. Democrats have raised $5.6 million. All 435 House seats are up for election.

The bill had also angered southern Democrats, who get considerable contributions from their state party political committees, and Democratic opponents of public financing, who claim the bill hurt their chance of getting Republican votes for a public financing amendment they intend to offer on the floor.

Because of the opposition, there was a good chance that a motion to consider the bill would have been defeated when brought to the floor on Tuesday.

In a blast at Republican, Thompson said, "They can not only have their cake to eat, they can have even more frosting on the cake they offered to help bake."

Republicans were so angry they were stallling legislation on the floor last week, including the Democrat's major legislative economic symbol, the Humphrey-Hawkins bill.

Thompson said he hoped his offer would "now close the sideshow and allow us to get back to the serious work of voting on an election reform law . . ."

The public financing amendment, to be offered by Reps. Thomas Foley (D-Wash.) and Barber Conable (R-N.Y.), would set a $150,000 limit on spending by House candidates, and allow federally financed matching contributions up to $50,000.