Mayor Marion Barry announced yesterday that the District will build a $50 million prison next to the D.C. Jail in Southeast Washington that will provide drug and alcohol treatment for 700 to 800 inmates.

The announcement apparently ended a 14-month controversy over selection of a site for a new prison, but reports of new delays in finding short-term housing for prisoners indicated that the immediate crisis of crowding at the jail may not be fully solved.

Renovations at the D.C. Superior Court Cell Block B, which had been expected to house about 80 weekend-only prisoners starting last night, were incomplete, and city officials said they would avoid violating a court-ordered inmate ceiling at the jail by moving inmates to Lorton Reformatory.

Inmates at Lorton's crowded minimum-security section told a reporter last night that the first of the weekend inmates had arrived there and that it appeared the newcomers would sleep on cots in a television viewing room.

Declaring that "we are moving from a crisis management system to a controlled management system," Barry said the new prison facility -- expected to take three years to build and which some sources said could cost up to $70 million -- is the centerpiece of a 10-point program aimed at containing the District's prison population.

Expansion of halfway houses, special probation and home detention programs, and an expanded jobs program for parolees are among the alternatives to incarceration that Barry said the program will employ.

The 10-point plan also includes the construction of a 400-bed addition to Lorton's central facility, for which a contract has been awarded.

However, the mayor provided little information about where new D.C. inmates will be housed until the new facility is built. The mayor said he was abandoning plans to convert the old 9th Police Precinct station at 525 Ninth St. NE into a temporary inmate facility.

Barry said the city's proposal to house inmates at the Ninth Street facility, which was vigorously fought by neighbors, and its aborted attempt to lease inmate space from a private western Pennsylvania prison were mistakes.

At the same time, Barry criticized the federal government -- whose Jan. 14 decision to end a 4 1/2-month program of accepting all newly sentenced D.C. inmates led to the current crisis -- for doing nothing to help the city solve its prison crowding problems.

"I was the only one who had the ball. I was the only one who was running with the ball," Barry said, "and therefore I was tackled all the time. The City Council would not take the ball and run with it. The federal government would not live up to its responsibility to take the prisoners and help us with the jail site."

Still, Barry said he is "optimistic" that the federal government would resume accepting D.C. prisoners. "We are not counting on the federal government," he said. "I am tired of their procrastination."

But Barry's decision to abandon plans for other temporary jail facilities seemed to rule out the possibility that the federal government would resume taking prisoners.

Deputy Attorney General D. Lowell Jensen has repeatedly told Barry that the city would have to make a "parallel effort" to that of the Justice Department -- which took more than 1,700 D.C. inmates into federal prisons -- before more prisoners would be accepted.

In the past, Jensen has insisted that city efforts would have to include "progress" on the construction of a new prison as well as the opening of several temporary facilities.

Assistant U.S. Attorney Royce C. Lamberth, who has been the federal government's negotiator with the city, said last night that the federal government, which owns the site where the new facility is to be built, had approved its use for a prison.

He said he had no comment on the mayor's statements or on whether the federal government would resume taking D.C. inmates.

The new facility, south of the jail, will be built on a site bounded by the D.C. Jail, D.C. General Hospital, the Anacostia River and Congressional Cemetery.

Since January 1985, when Barry said he supported building a new prison inside the District, the selection of a site has been enmeshed in controversy. Barry first named a commission to select a location, but the group recommended that no prison be built.

Later, when the federal government stopped accepting D.C. prisoners because the city had made no progress on new inmate facilities, Barry sparred with Justice Department officials -- rejecting three sites they suggested, including one adjacent to the McMillan Reservoir near Children's Hospital that city officials had requested.

Citing the growth in drug-related crimes and statistics that indicate that 65 percent of jail detainees test positive for drug use, Barry said the planned facility will emphasize drug and alcohol treatment and should serve as a model for the nation.

"This mayor -- even though it's been rough and rocky, and even though we have fumbled the ball now and then -- has now picked it up and is running full speed ahead. We have now put on the record clearly where we are going," Barry said.

Steven Ney, one of the attorneys for jail inmates whose suit resulted in a court-ordered cap on the population of the D.C. Jail, said several of the steps Barry announced yesterday were included in a consent decree signed by the city last summer.

"Those were supposed to be done starting last July," Ney said of such programs as increasing halfway house capacity and a special employment program for inmates.

Calling Barry's 10-point plan "another half-baked plan," Ney, who works for the American Civil Liberties Union's National Prisons Project, said the mayor should have expanded the use of alternatives to incarceration instead of building a prison.

He said the city could face more lawsuits if it does not stop packing inmates into facilities that do not have court-ordered caps. In addition to the jail, there are inmate population caps in effect for Lorton's central and maximum-security facilities and Youth Center I.

City Administrator Thomas Downs said the city had been unable to work toward expanding halfway houses before now because "the issue of the prison" and its location "drove everything else off the table."

Downs said the new plan would "not completely" answer the problem of where to house inmates while facilities are being built, but Barry said District officials indicated that weekend inmates would be housed at institutions that have no population cap.

Although the institutions with court-ordered caps are generally operating at close to those levels, many of the Corrections Department's other facilities are operating far above capacity, according to the Thursday population counts.

Barry said yesterday that he expects little community opposition to the proposed prison site, but council member Nadine Winter (D-Ward 6) said in a statement, "A great many of my constituents living near the current jail have expressed the sentiment that they do not like the jail that is there, and they do not want another one." She urged Barry to find a site downtown, close to the courthouses.

It was unclear where the money for the new prison would come from. The federal government has appropriated $30 million for a new District prison, and Downs said city officials hadn't decided whether to use city money or seek additional federal funds.

Paul Michel, administrative assistant to Sen. Arlen Specter (R-Pa.), chairman of the District subcommittee of the Senate Appropriations Committee, said Specter is committed to obtaining federal funds for the new prison.

Specter has suggested that the federal government might operate the new facility.

Barry said yesterday, "If the federal government wants to take it over, they should put in the money to operate it and we would have a deal -- probably." CAPTION: Chart, DISTRICT'S PRISON PLAN; Picture, Barry announces that new prison will require three years, $50 million to build; Map, PROPOSED SITE OF NEW PRISON