A bitterly divided Senate yesterday scuttled legislation to limit congressional campaign spending as outnumbered Republicans foiled a last-ditch effort by the Democratic majority to break a GOP filibuster that has blocked a vote on the bill for nearly a year.

Democrats reluctantly withdrew the bill after the Senate voted 53 to 41 in a record-setting eighth attempt to limit debate on the measure. The vote was seven short of the 60 needed to impose cloture and bring the legislation to a vote.

Saying a "willful, determined minority" was thwarting public demand for reform on campaign financing, Democrats vowed to make the dispute an issue in this fall's campaign and said they would return to the issue, possibly before the November elections.

But Republicans vowed just as vehemently to oppose Democratic demands for campaign spending limits and charged that Democrats' "obsessiveness" about imposing limits was exacerbating partisan divisions in Congress and threatening the fragile consensus needed to pass legislation in an election year.

"We have fought the good fight . . . we have kept the faith . . . but we have not finished the course," said Senate Majority Leader Robert C. Byrd (D-W.Va.).

"This is not the end . . . this is the beginning," said Sen. David L. Boren (D-Okla.), who joined Byrd in cosponsoring the bill.

"We have sliced the snake in seven pieces, and now we're going to cut off the head," said Sen. Alan K. Simpson (R-Wyo.) as the Senate prepared for its eighth cloture vote, breaking the previous record set last September on the same bill. "It's time to bury the dead," he said.

Despite tactics aimed at wearing down Republican resistance, including the arrest of Sen. Bob Packwood (R-Ore.) to produce a quorum during more than 50 hours of nonstop session earlier in the week, the Democrats did not change a single vote.

Even counting the votes of two absentees, Sen. Albert Gore Jr. (D-Tenn.), a presidential candidate, and Sen. Joseph R. Biden Jr. (D-Del.), who is recovering from surgery, the Democrats still had a potential of no more than 55 votes, the same as they had last fall in their seventh cloture attempt.

As before, the only Republicans who broke ranks to support cloture were Sens. John H. Chafee (R.I.), Robert T. Stafford (Vt.) and Nancy Landon Kassebaum (Kan.). Alabama Democratic Sens. Howell T. Heflin and Richard C. Shelby continued to line up with the Republicans in opposing cloture.

In failing to break the Republican filibuster, Democrats demonstrated once again how a united GOP minority can thwart the Democrats' control in the Senate by resorting to the filibuster to prevent action, evoking disputes that have raged through the Senate since its creation.

"A willful, determined minority was able to prevent the will of the majority . . . from being exercised," protested Sen. George J. Mitchell (D-Maine.).

"A majority can never overrrun a determined minority. . . . No legislative process can tolerate a tyranny by the majority," responded Simpson.

Democrats had hoped to portray the issue as one of cleaning up a corrupt process by proposing limits on campaign spending and on aggregate contributions of political action committees. They offered a variety of incentives to encourage compliance with voluntary spending limits, including public funding for a candidate whose opponent exceeds the limits.

But Republicans were able to rally their troops by characterizing the bill as an "incumbents' protection act" aimed at perpetuating Democratic control of Congress by barring Republicans from spending whatever it takes to overcome the advantages of entrenched Democrats, especially in the South. In their own proposals, they took aim at the sources of Democratic campaign funds, such as union-financed telephone banks.

What the Republicans were saying is that "if {they} can't spend more money, they can't win elections," said Sen. John F. Kerry (D-Mass.), chairman of the Democratic Senatorial Campaign Committee, which is scrambling to narrow the GOP's edge in fund-raising.

Simpson put it another way. "The Democrats know where the Republicans get their scratch, and the Republicans know where the Democrats get theirs, and neither of us are honest enough to deal with it," he said.

About the only thing the two sides agreed on was that the present system, under which spending on senatorial campaigns has risen from an average of $600,000 to $3 million over the past decade, is a "time bomb" ready to explode, as Sen. James J. Exon (D-Neb.) put it.

Simpson said senators have become "a bunch of bagmen running around the country" in pursuit of campaign funds. Byrd agreed, but dismissed charges by Packwood and others that the dispute, including Packwood's arrest during a manhunt for Republicans who had gone into hiding to avoid a quorum call Tuesday night, would make it harder for the Senate to function for the rest of the year.

While it would probably not affect such important issues as the ratification of the U.S.-Soviet treaty to eliminate intermediate-range nuclear weapons, it could jeopardize passage of more controversial and political legislation, Packwood said. "Sooner or later a bill is going to break down on partisan lines" and run the risk of another partisan standoff, he warned.

"These things come and go," responded Byrd, expressing confidence that the dispute would have no lasting effect.

Common Cause, the lobbying group that organized home-state pressure on senators to back the Democratic bill, vowed to continue its campaign. "For the first time since the Watergate period, a majority of senators is now on record in favor of comprehensive campaign finance reform. We have come a long way in the battle to clean up the national scandal in Congress," said Fred Wertheimer, the group's president.