Mayor Marion Barry's plan to borrow $215 million from the Federal Financing Bank, a cornerstone of his financial rescue program for the District of Columbia, appears to be in serious trouble after three days of hearings by the City Council.

A parade of expert witnesses, including the city's New York bond counsel, described Barry's proposal as legally impossible, fiscally questionable and politically ill-advised. Members of the council, exhibiting skepticism about the city's need for the money and the mayor's proposal for getting it, showed that they are unlikely to rubber stamp the bond plan if it ever comes before them officially.

The most likely casualty of a failure to float the loan would be the mayor's commitment to balance the budgets for the next two years without further tax increases, and he would probably be compelled to make even deeper cuts in staff and services than already contemplated.

Barry, at a press conference last week, said the council hearings on his three-year financial plan produced "not one thing that was new." In an obvious reference to Council Chairman Arrington Dixon, who organized the hearings, he said that "if people in responsible positions don't like my plan, it's up to them to come up with something else. Otherwise, they're just whistling in the wind."

But over the last several months, changes in laws governing the city's finances and budgetary process have strengthened the council's hand and limited the mayor's power to circumvent a body that previously had little real power over the city's monetary affairs.

Dixon made clear that the council intends to participate in the city's budgetary process, borrowing program and spending analysis in ways that were formerly beyond its legal or technical ability.

"We support the notion that the mayor has to have a plan for dealing with the city's cumulative deficit and acute shortage of operating funds," he said, "but it has to be more believable. The members have a lot of uncertainty about whether this plan can be put in place."

Barry has staked much of the prestige of his administration on the complex plan to restore the District's fiscal health that he unveiled in July. Faced with a cumulative deficit that is expected to reach $409 million by the end of this fiscal year on Sept. 30, Barry and his financial advisers have calculated that they need the $215 million in immediate cash to keep the city solvent and that the rest can be paid off through annual set-asides of operating funds in future years.

Technically, the loan would be in the form of bonds to be sold to the Federal Financing Bank.The District has never sold its own bonds to raise money but has continued to borrow from the U.S. Treasury as it did before home rule. The city's accountants and financial advisers have told Barry the city is not yet ready to face the scrutiny of the private bond market to float its securities, so Barry proposed to sell bonds to the Federal Financing Bank, an obscure agency of the Treasury that lends money to U.S. government agencies or to any borrower whose loan is guaranteed by a federal department.

Barry said when he proposed the idea that the District does not qualify on either count and that congressional approval would be needed to allow the city to go to the FFB. But in the hearings called by Dixon -- which Barry did not seek and in which he did not participate -- witnesses told the council that the proposition is on far shakier legal ground than was previously understood.

Roswell C. Dikeman, a partner in the New York law firm of Willkie, Farr & Gallagher that has been retained as co-bond counsel to the District, said that "the issuance of general obligation bonds to fund a budget deficit or for current operating expenses is not permitted" by the Home Rule Charter. Even if Congress were to amend that charter and authorize the city to deal with FFB, he said, "it is likely that Congress would also provide that the interest on such bonds would be taxable, thereby probably increasing debt service costs to the District."

As for going into the commercial bond market for the first time, Dikeman said, even if it were legal for the city to float bonds to pay off its debts, investors would be troubled by the fact that the city's debt service money must be appropriated by Congress each year and "accordingly, a District bondholder has no assurance that moneys will legally be available each year in time to pay his obligation as it matures." The greater the uncertainty about repayment, he said, the lower the rating the city's securities would receive from New York bond-rating houses, and the higher the interest the city would have to pay as a result.

Matthew S. Watson, the city auditor, agreed with Dikeman's assessment of the legal impediments to the bond issue and said it would be "foolhardy" to attempt to issue bonds without the extensive congressional action that would be needed to resolve all the legal questions.

Eugene Keilin, vice-president of the New York investment banking house of Lazard Freres, financial advisers to the District government, said legislation was being prepared for introduction in Congress in January to clear away all the obstacles to the bond issue. But council members indicated that even if that legislation were enacted -- a proposition about which they expressed doubt -- they were not convinced that the District government really needed all that money at once. The council would have to issue a resolution approving a bond issue.

"How much do we need and when do we need it?" Dixon asked.

"You absolutely don't need all the money at one time," Keilin said.

"What really is the $215 million?" council member Betty Ann Kane asked. "What do we need in the next year?"

Kane said she would want controls written into any bond resolution to ensure that the funds were actually being used for the purposes specified by the mayor, but repeated questioning by council members of the city's private accountants failed again to pin down exactly what those purposes would be.

Asked to explain the components of the $215 million that the mayor said is the current cash need, Bert Edwards, an accountant from the firm of Arthur Andersen & Co., answered by taking the reported cumulative deficit of $409 million and subtracting various non-immediate obligations to get down to $215 million. But council members said later that if they do not accept the validity of the $409 million figure, then Edwards' use of it to arrive at the size of the proposed bond issue is not satisfactory.

"The accuracy of the numbers is going to be our focus," Dixon said in an interview after the hearings. "Can they give us the data we need to make judgements? We just don't have confidence in what's coming out over there."

Over the past year, the council has acquired its own full-time staff of budget analysts, the legal power to review and disapprove city applications for federal grant funds, the power to veto requests from the mayor for short-term borrowing and changes in the budget regulations that make it difficult for the mayor to include items over council objection or move funds around without council approval.

Barry, however, has been reluctant to acknowledge the council's encroachment on areas of financial management in which it previously had only a symbolic role. "It would help if the council were with us," he said after the hearings, "but there is no legal requirement" that the council approve the details of his financial plan. "Council support is critical only in terms of psychology and politics."