Gov. Harry Hughes, declaring that the end to Maryland's long savings and loan crisis "is in sight," unveiled a $320 million plan today to free deposits at Old Court Savings & Loan by December 1989 and to finance the sale of two crippled Montgomery County thrifts.

If Hughes' plan is approved by the General Assembly and Baltimore Circuit Court Judge Joseph H.H. Kaplan, Old Court's 50,000 depositors will be able to withdraw at least $1,000 each on March 31. They would receive an additional payment on Aug. 31 and quarterly payments thereafter.

The Hughes administration received new offers from two Virginia financial institutions interested in acquiring the two Montgomery thrifts, where funds also are frozen, spokesmen announced late today.

A Meritor Savings Bank official said his Arlington-based institution has made a formal offer to buy the crippled Community Savings & Loan of Bethesda, while the president of Dominion Federal Savings and Loan announced that his institution had offered to purchase the ailing First Maryland Savings & Loan of Silver Spring.

In a speech to the General Assembly, and later in his first news conference in three months, Hughes, a likely candidate for U.S. Senate, stepped up his public profile after taking a beating in recent months, particularly from depositor groups.

He pledged an outlay of about $164 million to finance the sale of Community and First Maryland, about $78 million of which he claimed the state will recover through civil lawsuits against the former thrift owners. Those transactions would require federal approval.

The Hughes administration has a separate offer from a Maryland savings association to acquire First Maryland.

The two Montgomery thrifts and Old Court are under state control and represent an enormous financial liability for the state government, which insures deposits at the three associations.

The governor said today his plan to help Old Court depositors and sell Community and First Maryland meets "twin obligations -- to save the victims of this massive fraud and to spare the taxpayer from either a tax increase" or cutbacks in state services.

The centerpiece of Hughes' announcement was a long-awaited plan to release some of the $600 million in deposits that have been frozen at Old Court since May, when a run by depositors prompted the state to take control of the thrift and, later, of the other thrifts. Hughes said depositors would receive quarterly payments and that they would receive "every penny" of their funds up to $100,000 per account.

He said he intended to make equal payments to each depositor so that customers with small accounts would recover most of their money first.

With the Aug. 31 payback, about 20,000 Old Court depositors will have received all of their money if the plan is approved, he said.

To finance the payment and purchase plans, Hughes proposed using large infusions of cash from the state's general fund and the Maryland Deposit Insurance Fund, the state agency that currently controls five large thrifts. Hughes also recommended a transfer from a special "This is a plan of limits, because there are limits to what we can afford . . . . We've got to draw the line." -- Gov. Harry Hughes state transportation fund and selling bonds created in a special legislative session in May. Key elements of the financing plan are:

*$100 million from the Transportation Trust Fund, a $1.8 billion fund of revenue from gas taxes, bonds and fees that is used to pay for state road construction. This money would go toward the first two quarterly payments later this year, Hughes' aides said, if the General Assembly passes legislation requiring repayment to the road fund within three years.

*$80 million from the Maryland Deposit Insurance Fund. $70 million from the sale of bonds.

*$70 million in general funds. Of that, $55 million would come from the fiscal 1986 budget, for the period that will end in June. The remaining $15 million is to be included in the fiscal 1987 budget Hughes presents to the General Assembly next week.

Hughes, hammered in recent months by increasingly bitter criticism from depositors clamoring for access to frozen funds, today came out strongly in defense of the interests of taxpayers in the crisis.

"I know that many will not like this plan -- particularly those with large deposits at Old Court," he said. "This is a plan of limits, because there are limits to what we can afford. The fact is the State of Maryland cannot and does not print money; and we've got to draw the line, and no amount of pressure should move us to step over the line."

Depositors' representatives criticized the proposal. Because of the long payout period and because they are not being paid interest, they effectively will receive only 80 cents for every dollar they have invested, spokesmen said.

"When you have to wait months for insurance, that's not insurance," said David Lange, a co-chairman of the Maryland Savings and Loan Depositors Committee. "When you have to wait four years and eight months, that's outrageous."

Lawmakers, who also are eager to see funds returned to depositors, were generally more receptive.

State Sen. John C. Coolahan (D-Baltimore County) said, "I thought the speech was very good. Hughes ought to be applauded. He's been taking heat that's unwarranted."

Some legislators, however, questioned Hughes' claims that the state will eventually recover all but perhaps $50 million of its money through civil lawsuits against former thrift owners and the sale of thrift assets. And Montgomery County lawmakers, whose pleas for state funds to relieve their congested roads have become increasingly intense in recent years, said they believe that the transfer of transportation money could jeopardize their coveted projects.

"We're using blue smoke and mirrors if we tell the taxpayers they are not going to pay for the bailout," said Sen. Sidney Kramer, a Democrat and the chairman of the Montgomery delegation.

He added, "There's a strong possibility that transportation money won't be paid back, and the jurisidiction that will suffer the most is Montgomery County because we are clamoring for road construction."

State Del. Timothy F. Maloney (D-Prince George's), who chairs the appropriations subcommittee that reviews transportation funding, said the trust fund transfer would result in a loss of $20 million to $24 million of interest income generated by the fund. "The fact is, that's $20 million to $24 million worth of projects that aren't going to happen," he said.

Thursday, a report was released on the origins of the state's savings and loan crisis, in which the state agency that regulates S&Ls was strongly criticized. Hughes announced today that William S. LeCompte Jr., a longtime senior employe of that agency, was asked to resign because of his role during the formative years of the S&L industry.

LeCompte, an employe of the state Division of Savings and Loan Associations since 1973, became deputy director of the agency in 1981 and acting director last year.

In his remarks today, Hughes expressed hope that the sales of First Maryland and Community will go through. Later, William L. Walde, chairman of Dominion Federal, confirmed that his company has offered to buy First Maryland but declined to provide any details of the offer.

"We're prepared to give every First Maryland depositor 100 cents on the dollar," he said. Dominion Federal, with assets of $1.3 billion, is the largest thrift in Virginia.

Sources at Meritor, a subsidiary of a Philadelphia financial services company, confirmed their offer to purchase Community. The Meritor offer "specifically excludes" any of the assets held by Equity Programs Investment Corp. (EPIC), a bankrupt mortgage investment subsidiary of Community, a spokesman said. PSFS Savings Bank, a subsidiary of the group that owns Meritor Savings, holds $217 million in EPIC-related securities and loans and is one of the largest potential losers from EPIC's collapse. CAPTION: Picture, At news conference, Hughes announces details of plan to release some of the $600 million in frozen Old Court deposits. The Washington Post