The Bush administration said yesterday it has dropped its opposition to the creation of a $100 million international fund to help developing nations end their use of chemicals that erode the ozone layer shielding the Earth from withering ultraviolet rays.

The policy reversal follows a storm of criticism and personal appeals to the White House, including those by British Prime Minister Margaret Thatcher and American corporate chiefs. It also extricates the United States from almost certain diplomatic isolation at a London conference next week on an accelerated timetable to curb use of the dangerous chemicals -- chlorofluorocarbons (CFCs) -- and eventually eliminate them.

It also marks a concession by White House Chief of Staff John H. Sununu. Sununu led the fight against the United Nations-proposed fund, which was supported by Environmental Protection Agency Administrator William K. Reilly. The policy shift announcement was made in a White House statement released under Sununu's name.

The U.S. position had raised fears by corporate giants who produce or use CFCs that Washington's resistance could have subjected American companies to trade barriers by nations participating in the fund. Chairmen of companies such as E.I. du Pont de Nemours & Co, and Motorola Inc. had appealed to the White House for a change in policy, according to administration sources.

First proposed at an international meeting last month in Geneva, the fund is considered essential to enlist the support of such modernizing giants as China and India for a 1987 treaty calling for reductions of the versatile CFCs. The gases are used for refrigeration, cleaning of computer parts and production of polystyrene items.

The United States, whose contribution was to have been assessed at $25 million, was the only nation to oppose the fund. Publicly, U.S. officials had said existing programs of the World Bank were adequate to assist developing nations phase out use of CFCs.

But privately, Sununu and Office of Management and Budget Director Richard G. Darman had argued the expenditures could set a dangerous precedent for far more costly future requests to help the Third World reduce its reliance on traditional energy sources, such as coal, which cause global warming.

In yesterday's statement, Sununu said the United States will submit its own fund proposal at next week's conference, with conditions underlining the "precedential nature" of the fund and the "unique circumstances" that make it necessary.

Sununu said the proposal will meet President Bush's "essential criteria." They are "adequate scientific evidence" of the causes and effects of ozone depletion, "strong evidence" that the fund would "successfully address" the problem and the "reasonable and predictable" nature of the expenditures needed.

Details of the proposal were not made available. But an administration official said the U.S. plan is expected to call for $100 million, with Washington assessed 20 to 25 percent of the costs in line with its overall contribution to international organizations. If China and India join the pact, the fund would grow to $200 million.

The fund, to be administered by the World Bank, would be used to help Third World industries that use CFCs convert to alternative chemicals, cover the extra costs of alternatives and identify new ways to replace CFCs.

While 54 nations have signed the 1987 treaty and are expected at the London conference to vote for elimination of CFCs, scientists say efforts to preserve the stratospheric ozone layer 10 miles above the Earth will be frustrated if developing nations not now party to the pact fail to curb their growing use of the popular and cheap chemicals.

Washington reaction to the policy shift was favorable among those advocating CFC phaseout. Sen. John H. Chafee (R-R.I.) said that without a fund to enlist the cooperation of the Third World, "all that will be accomplished by the developed nations will be canceled."

Liz Cook, of Friends of the Earth, cautioned that if the administration proposal has too many strings attached, developing nations might not be satisfied.