A congressional conference committee yesterday dealt a heavy blow to the city's home rule government by approving a District of Columbia budget that requires Mayor Marion Barry to hire 200 police officers the mayor feels are not needed.

The lawmakers' decision to spend an extra $6 million to build the police force back to at least 3,880 officers was a setback for Barry but not for the police union that endorsed his candidacy in 1978.

Yesterday's action by House and Senate Appropriations Committee members, who also voted a record high $295.4 million federal payment in lieu of taxes and severely slashed the proposed capital improvements budget, was a victory for Rep. William H. Natcher (D-Ky.), an aggressive watchdog over city finances. For more than two decades, Natcher has insisted on a large police force to protect city residents, federal officials and tourists.

More than 200 officers abruptly retired last summer to take advantage of increased pensions and other early retirement benefits made available by the city in an effort to reduce its work force without layoffs.

The police force now has fallen to 3,660 uniformed members, which means that the city will have to replace all of those who retired in order to reach the level mandated by Congress.

Congress set aside $6 million to pay salaries of the added police officers. But even with money available to maintain the larger force, the city faces a formidable task in hiring enough officers to bring the department up to full strength because a newly enacted law requiring all new city employes to live in Washington -- where housing prices are among the highest in the region -- is hindering recruiting efforts.

The city recently sent notices terminating 10 new employes who failed to move into the city as required by the residency law, and has warned several others that they may be terminated. Less than 20 percent of the city's present police officers live in Washington.

Barry had sought to trim the force to 3,359 members by next Sept. 30, despite an increase in reported crime that has pushed the city's crime rate to its highest level in almost a decade. While initiating the cutback as an economy measure, he portrayed the issue as a test of the city's rights under home rule to guide its own destiny.

Despite vigorous and persistent efforts yesterday by Sen. Patrick J. Leahy (D-Vt.), chairman of the Senate D.C. Appropriations subcommittee, to uphold the mayor, Natcher and other House members insisted that the city's 1975 Home Rule Charter maintains congressional control of the city's budget.

"There is a major federal responsibility . . . in the name of the masses of the nation, not just [residents of] the District of Columbia," observed Rep. Gunn McKay (D-Utah).

Larry Melton, executive vice president of Local 442 of the International Brotherhood of Police Officers, the police union, said he was elated at the conferees' decision to require a 3,880 member force. "This keeps the force up to the size where we can protect the people of the District of Columbia and protect ourselves," he said.

D.C. Budget Director Gladys W. Mack said she was disappointed by the police mandate but pleased by the probability that the city would have its budget enacted before Congress adjourns for the year. Final action on the budget is expected the week after Thanksgiving. In the meantime, the city is operating under a stopgap resolution permitting it to spend at the level of the last fiscal year, which ended Sept. 30.

The operating budget as approved by the conferees totals just above $1.5 billion. To help support it, including $6 million in higher police payroll expenses required by yesterday's action, the conferees agreed to grant a record federal payment of $295.4 million.

The federal payment is an annual contribution designed to compensate the city for taxes it cannot collect on federal and foreign embassy property and for unusual expenses the city faces because of its role as the nation's capital. Last year's payment was $276 million. In this year's pending budget, the House had approved $290 million and the Senate approved $296 million.

The police funding, the federal payment and the magnitude of the city's construction program were the biggest issues that separated the conferees, who met briefly Thursday and then returned yesterday to resolve their differences. m

The sharpest cuts came in the proposed public works budget. The city had sought authority to start work on $256.4 million in projects. The House trimmed that to $247.9 million. The Senate then chopped the total to $218 million by eliminating several urban renewal, transportation, health, police and fire department projects. The conferees raised that to $221 million.

Restored yesterday were $2.5 million to build underground utility lines in the Fort Lincoln urban renewal project in the Northeast and $364,000 to continue the city's program of cutting down dead trees and planting new ones along city streets. A House conferees' proposal to grant $5.5 million to expand the ambulatory care center at D.C. General Hospital was rejected.

At the insistence of House members, the conferees restored language in the bill prohibiting the city from spending any federal money to provide Medicaid abortions for poor women. Leahy had dropped it from the Senate version, insisting it was superfluous since federal law already bans such spending. The measure does not prohibit the city from spending local tax-generated funds for such purposes.

The conferees also decided to retain language, which has appeared in every D.C. budget since the 1930s, prohibiting the use of fare meters in taxicabs. But for the first time, at Leahy's suggestion, it decided to ask the D.C. City Council to recommend whether the ban should be eliminated.