When President Lyndon B. Johnson signed the first great federal aid to education program in 1965, he had high expectations. The Elementary and Secondary School Act, he said, would be a cornerstone of his so-called war on poverty, "the key which can unlock the door to a Great Society."

No part of that act was more important to Johnson than a program called Title I, with its emphasis on helping poor children. "As a son of a tenant farmer, I know that education is the only valid passport from poverty," he said at the ceremony at the one-room schoolhouse in Stonewall, Tex., his first teacher, Kate Loney, at his side.

But even supporters acknowledge that, after 17 years and $35 billion in federal funds, Johnson's dream of wiping out the achievement gap between poor children and their more advantaged peers has not been realized.

The story of Title I is a case study of the hopes that drove Johnson's Great Society programs in the 1960s. It also is an illustration of the dilemma that always has faced federal education programs.

On the one hand, Congress has been reluctant to put strings on the federal money because of the sanctity of local control of schools. On the other, the absence of those strings has made it difficult to demonstrate results that justify huge expenditures for a national program.

August W. Steinhilber, associate executive director of the National School Boards Association, was an administration lobbyist when the act was rammed through Congress in 1965. He remembers that there was some confusion about the new law. The language was clear enough: Congress declared that it was national policy to provide money to districts serving areas where children from low-income families were concentrated.

But some members of Congress described it in speeches as general aid to education, Steinhilber said. The result was that in its early years, Title I was marred by misspent funds. Some districts used the money to build swimming pools or cafeterias instead of providing extra help for children in poor schools who trailed their peers academically.

In the early 1970s, civil rights groups used the horror stories about misspent funds as ammunition to press for and win tighter federal controls, including "comparability" regulations, which require comparable local funding of all schools in a district. Many supporters of the program see those regulations as the key benefit of Title I, because they ensure that school districts don't neglect poor schools.

Because of the early problems, however, the first researchers could find little evidence that the program improved achievement scores. So, in 1974 and again in 1978, Congress mandated evaluation rules and studies to gather better achievement data.

By the time the 1978 amendments to Title I were enacted, however, many practitioners in the program were griping that the federal law was too restrictive, that process was overtaking substance.

Last summer the late Rep. John M. Ashbrook (R-Ohio), the ranking Republican on the Education and Labor Committee, engineered additional language to the reconciliation bill loosening the federal ties. Some champions of the program fear that the proposed cuts in funds, coupled with the less stringent rules, will mean a return to the early unsuccessful days of the law.