The District intends to build a new 400-inmate prison facility at Lorton Reformatory as an interim solution to relieve overcrowding in the city's prisons because the federal government no longer wants to put city prisoners into federal institutions, officials said yesterday.

City Administrator Thomas Downs said the Justice Department had "informally" told the city that within a week it would cancel an agreement under which inmates newly sentenced in the city's courts are automatically sent to federal institutions.

A Justice Department official said yesterday that the government's decision was prompted by the District's inaction concerning long-term solutions to the overcrowding problem.

The city is under court order to keep the number of inmates at the D.C. Jail below 1,695, and the federal prison system has absorbed 1,500 inmates since August to keep the jail population down.

Downs said the facility proposed for Lorton will consist of "temporary" housing modules in which inmates will be kept until the District is able to construct a new prison in the city.

Congress has approved spending $30 million in federal funds over the next two years for construction of a new prison in the District. In March, Mayor Marion Barry reversed his longstanding opposition to the idea and appointed a 15-member panel to study the matter, including the controversial issue of where in the city to build it.

The panel is expected to submit a final report next week that advises against new construction in favor of alternatives to incarceration. Such alternatives might include more half-way houses and extended parole.

The plan for a temporary facility, contained in U.S. District Court documents that were made public Thursday, was devised at the " insistence of the U.S. Justice Department, Downs said.

He said that construction of a new prison in the city will take at least three years from the time a site is chosen for it, and that Justice had indicated it is unwilling to continue housing the city's prisoners for that long.

Downs said the city had not received written notice that the agreement has been canceled, but that it is expected next week. Downs said that if the agreement is cut off abruptly, there will be a serious effect on the District's ability to house prisoners.

He said Mayor Marion Barry has asked to meet with Attorney General Edwin Meese III to discuss the decision.

A Justice Department official suggested that one reason for Justice's decision is that the nation's federal prisons are now operating at 42 percent above capacity.

He hinted that the city could endanger its authority to choose a site for a new prison if it finances the new Lorton facility with a portion of the money Congress has appropriated for a new prison in the District.

U.S. Attorney Joseph E. diGenova told the D.C. City Council in early December that "unless the District government uses the money appropriated for a new prison, it may well imperil its control over site selection." In the same appearance, diGenova noted that there were 2,465 District inmates then in federal prisons and that the "federal government's patience and willingness to remain the District's jailer is not endless."

Though there are no final plans for the new facility, city officials have not been able to come up with any other solution for housing inmates, Downs said.

Court documents describe the facility as a "separate and self-contained facility" of four "temporary" modular housing units that would be built inside the perimeter fence of the existing Central facility, one of the eight facilities at the District's 3,000-acre penal institution in Southern Fairfax County.

The plan was first disclosed Friday by The Washington Times, which asked Judge June J. Green to make public a court document that detailed the plan, and that had been sealed since Oct. 28.

Fairfax County Board of Supervisors Chairman John F. Herrity, long an opponent of the city-run Lorton facility, has reacted angrily to the proposal.

Herrity, who has previously criticized the city for not informing Fairfax of developments at Lorton, said he was not told of the plan. He accused the city of "duplicity" in making a "secret agreement."

Herrity said that Mayor Barry told him yesterday that the plan was kept secret because of fears that Herrity might somehow scuttle it. "Politically, I can understand that," Herrity said. "But the problem is how many other secrets does he have hanging out there that are going to impact on the people of Fairfax County?"

Barry refused to comment at a news conference yesterday and referred all questions about the prison to Downs.

Downs, at a late afternoon news conference, said that the city had asked for the plan to be sealed because it was not final.

Downs said that funds for the temporary facility would come from $30 million approved by Congress for the construction of a new prison. He said the money could be released to the D.C. Department of Corrections for "emergency" relief that is not directly related to a new prison, provided the city reimburses the funds in full.

Downs said that the only area suitable for new housing at Lorton is the Central Facility. It will take 12 to 18 months to plan and build the facility, Downs said.

Downs said Justice "strongly suggested" the city consider modular housing as a temporary solution because it is relatively cheap and does not take long to build. An industry spokesman said that a medium security housing facility such as that proposed for Lorton can be erected in 10 to 16 weeks for $18,000 to $25,000 per bed. By contrast, a D.C. Department of Corrections spokesman said that a permanent prison facility can cost up to $100,000 per bed.

The plans for a new facility were part of a consent order governing the population at the Central facility in which the District had agreed not to allow the population there to exceed 1,125.

According to Peter J. Nickles, a lawyer who represents the inmates, the District began exceeding the population cap last fall. He said he agreed to an increase in the ceiling on the number of inmates at Central to 1,170 provided the District accelerate the renovation of cell blocks and dormitories.

Meanwhile, according to Downs, the District realized that the only area where new housing could be constructed was at Central and it negotiated with Nickles to allow a new facility to be built there.

Virginia Sens. John W. Warner and Paul S. Trible and Rep. Stan Parris, all Republicans, sent a strongly worded letter to Meese yesterday urging him not to cancel the agreement but to block construction of the new Lorton facilities.

Ending the agreement "would have disastrous consequences for our constituents" the letter said, at the same time noting that Justice "is not responsible for the District's failure to respond in a timely manner to its long-standing need for more prison space."