The headline on a story yesterday incorrectly said that Robert L. Johnson, president of District Cablevision Inc., threatened to break his firm's contract with the city. The headline implied that Johnson told city officials that he would break the contract unless certain action was taken. Johnson, responding to a question from a Post reporter, stated that, if modifications were not made, his firm would be unable to obtain financing and thus would not be able to fulfill its contract.

The president of District Cablevision Inc. said yesterday that his company will break its contract to build a cable television system here and file for bankruptcy if the D.C. City Council refuses to grant modifications necessary to persuade the nation's largest cable operator to finance the system.

Robert L. Johnson said District Cablevision's board of directors has voted 9 to 2 "not to continue the process" if Tele-Communications Inc. (TCI), a Denver-based cable operator, withdraws its offer to provide at least $30 million in project financing.

The City Council was told Tuesday night that TCI's involvement was contingent upon the city's approving a number of changes in the franchise agreement, including a clause that would relieve District Cablevision of responsibility for wiring the entire city if the company's average cost per unit exceeded $500.

Yesterday, several council members complained of being pressured by District Cablevision to make a decision by Tuesday without being supplied by the company with crucial information, including a timetable for wiring homes and how much customers will have to pay.

"We don't have the whole picture," said Council Chairman David A. Clarke. "I'm not signing any blank check with my name that doesn't involve all constituents getting cable."

John Wilson (D-Ward 2), said that it was time for District Cablevision to end the "lunacy" and to be honest in telling the council what needs to be done to salvage the contract.

"They are not going to wire anything they don't want to wire," Wilson said. " . . . If there is no schedule for who gets it, I don't care about concessions. I'm willing to start over. It is clear to me the city was lied to. There is really a credibility gap here."

Mayor Marion Barry recommended last week that the council accept most of the modifications sought by District Cablevision, but reasserted his commitment to making the system available to all residents.

However, according to sources, Johnson met with Barry Tuesday in an effort to persuade the mayor to include a ceiling on construction costs in the emergency legislation he plans to send to the council next week.

Johnson said yesterday that his company is at least $1 million in debt and that without a major investment from TCI, District Cablevision would not be able to build a system. If the company ended its agreement with the city, local shareholders, including some who invested $100,000 in the system, would lose their money, according to Johnson.

At Tuesday night's hearing before the council's Cable Television Committee, John Sie, a TCI vice president, and Johnson teamed up to argue in favor of the proposed modifications. Ten of the council's 13 members attended the long, and at times contentious, session.

TCI currently owns a 20 percent interest in District Cablevision. If the company agrees to put up an additional $30 million to finance the cable system, it would have an 84 percent interest in the system, according to Sie.

Johnson said that District Cablevision, a local, minority-controlled company, would call the shots. But some council members suspect that TCI will assume control and they pressed for details of the agreement that TCI would make with District Cablevision to protect its sizable investment.

Betty Ann Kane (D-At Large), chairman of the cable committee, said yesterday that she was convinced District Cablevision would remain the controlling firm "only on paper" if TCI provides the financing. Kane said that she is not prepared to recommend adoption of all of the modifications sought by District Cablevision.

"They are not talking about universal wiring," Kane said. "There is a great big loophole, the extent of which we do not know."

Nadine P. Winter (D-Ward 6), a member of the cable committee, complained about TCI's approach.

"There are retired people on the list of shareholders who have put up their money and TCI, a billion-dollar corporation, is saying they can't put up their money until it's safe," Winter said. "It is as though they are forcing us to do things . . . . Bob Johnson is going to wind up as an employe" of TCI.

Other concessions under consideration by the council include reducing the number of residential channels from 78 to 54, delaying the activation of a separate network for business uses and greatly reducing funding for public and municipal programming.

District Cablevision is deeply in debt. It failed to pay the city a $250,000 cable award fee on June 30, as required by the contract. It also owes $465,000 to the Chesapeake & Potomac Telephone Company, which did preliminary engineering and design work in connection with its contract to build, maintain and own the cable transport lines.

Delano Lewis, a C&P vice president, said yesterday that the phone company is ready to negotiate a new agreement with District Cablevision once it sees what modifications are approved by the City Council.