Light heavyweight champion Michael Spinks pulled out of last night's fight against Eddie Mustafa Muhammad after the challenger failed to make the weight limit by 2 1/2 pounds and the bout was downgraded from a 15-round championship event to a 10-round nontitle match.

Spinks' decision was announced via telephone at 6 p.m. yesterday, four hours before what was to have been the first championship fight in the District since 1959.

The entire fight card was canceled.

Promoter Butch Lewis apologized but blamed Muhammad for the fiasco. After the 31-year-old challenger failed to make the limit at an 8 a.m. weigh-in, officials gave Muhammad two hours to lose the extra pounds. But Muhammad never made the attempt and returned to his hotel room to rest and eat.

Lewis, who said he would lose "about $200,000" because of the cancellation, said, with tears in his eyes, "Michael decided he would not dignify Mustafa by getting in the ring with him." At a noon press conference, Spinks had said he would face Muhammad in a 10-round nontitle match, but later decided against it.

Spinks said, "As I was lying in bed and resting, I thought, 'Why am I going through with this?' I was tired of Mustafa's intolerable action. He took us through every storm to make us take this fight, and then he comes and doesn't make weight."

Mayor Marion Barry had lobbied hard to bring a championship bout to Washington and, in a statement, said he was "extremely disappointed . . . This action is the result of a series of tragic events."

Eddie Futch, Spinks' trainer, said, "Michael made a very good decision. In addition to the physical preparation, there is psychological preparation for a fight. I felt it was risky for him to be prepared for a 15-round title fight and then to have it downgraded to a 10-round nontitle fight." One of Spinks' handlers said the champion did not want Muhammad to profit from failing to make the weight. Spinks took the title away from Muhammad two years ago in a 15-round decision in Las Vegas.

At a news conference in L'Enfant Plaza Hotel to formally announce the cancellation last night, Muhammad squared off against Dwight Braxton, a former light heavyweight champion, who interceded on behalf of Lewis. The two were restrained by supporters as a crowd shoved both men toward the wall. District of Columbia police shoved Muhammad into an adjoining room and restored order. Braxton had been scheduled to fight on the card.

Before the interruption, Muhammad said: "I want to tell my friends in Washington I am sorry for the events that have taken place. This morning, I know I made the 175-pound weight. But that is another issue. We got to the point where I said, 'All right, I didn't make the 175-pound weight, I will sign a contract to fight Michael Spinks 10 rounds.' I took a reduction in purse. I didn't care, I just wanted to fight and show him I was the real champion. The man said all right.

"Then I go to sleep and when I wake up two hours later, they tell me the man doesn't want to fight."

Officials of both the World Boxing Council and the World Boxing Association said Muhammad will be dropped from their rankings as a result of his actions.

Cora Wilds, chairman of the D.C. Boxing and Wrestling Commission, said the commission plans to meet today and likely suspend Muhammad indefinitely.

Robert Sigholtz, manager of the D.C. Armory, where the fight was to take place, said ticket purchasers can get full refunds starting at noon Monday at the location where they were purchased--the Armory ticket office, Ticketron locations and Douglas Records at 1108 F St. NW.

Sigholtz said he thought the Armory Board could lose $10,000 because of the cancellation, though he indicated the facility did get a deposit from Lewis. "We would take any legal steps we had to in order to get the money back," Sigholtz said.

The fight began to unravel yesterday morning, when a naked Muhammad stepped on the scale at 8:10. Muhammad dangled his right foot off the scale. When he finally put all his weight on the platform an official called it out--177 1/2 pounds.

Wilds told Muhammad he had two hours to lose 2 1/2 pounds. Muhammad took the elevator upstairs to his room at the L'Enfant Plaza. He could have attempted to jog or sweat off the weight in a steambath--a draining, yet possible task.

Before his first fight with Spinks two years ago, Muhammad spent hours in a sauna to make weight. The next day he lost his title to Spinks.

When Lewis was told at 10:30 a.m. that Muhammad had no intention of losing the necessary pounds, he negotiated what he thought would be an acceptable settlement with all parties concerned. The fight would become a 10-round non-title bout, and Muhammad's purse would be cut from $150,000 to $100,000 and Spinks' from nearly $1 million to $500,000.

Don Majeski, the matchmaker for Butch Lewis Productions, said he tried earlier in the day to get a substitute opponent but none could be found. "I couldn't get a guy in 12 hours," Majeski said.

Lewis said that less than 4,000 tickets had been sold for the 10,000-seat Armory. "If this goes as I suspect, it may be another 42 years before they hold a championship fight here," said Lewis.

According to the Ring Record Book and Encyclopedia, no challenger has ever failed to make weight for a title fight.

At a noon press conference, Muhammad claimed the scale had been fixed, that he was indeed 175 pounds ("I know my body!") and Spinks, who weighed in at 175, was actually lighter.

The scale had been inspected by Francis J. Murray Jr., an investigator for the Bureau of Weights and Measures.

Spinks met the press at the same session looking tired and disgusted. "(Muhammad) chose a lousy excuse," he said. "This guy's been making excuses ever since I beat him two years ago. Maybe they should ban him from boxing."

After the cancellation was announced, Muhammad was unavailable for comment. He was eating in a hotel restaurant.