The government yesterday announced a new strategy in the still-growing savings and loan cleanup that it hopes will reduce the cost to the taxpayers of disposing of hundreds of sick thrift institutions.

Regulators will seek to sell ailing S&Ls before they go broke instead of waiting for them to fail, taking them over and running them under government management while looking for a buyer, the announcement said.

The government will try the new strategy with 10 institutions in the next three months and if it works will expand it to another 257 S&Ls that are expected to require government assistance in the next 12 months.

The savings and loans expected to fail in the next year include one in the District of Columbia, seven in Maryland and eight in Virginia, regulators said yesterday. They declined to identify the thrifts.

The policy change is meant to get around what Federal Deposit Insurance Corp. Chairman L. William Seidman said is a major flaw that has shown up during the first year of the thrift industry cleanup.

Once the government takes over an S&L, Seidman said, its value starts to drop because many customers do not like doing business with a government-run institution and because bureaucrats are not necessarily the best bankers.

The major change in policy, Seidman said, is meant to short-circuit that problem by putting S&Ls up for sale while they are still operating in private hands, avoiding the stigma of a government seizure.

The new strategy was announced against a backdrop of escalating accusations between the Bush administration and Congress over responsibility for the $300 billion scandal and a cleanup that has proven to be far more difficult and costly than anticipated.

The new Accelerated Resolution Program follows on the heels of the administration's Operation Clean Sweep, under which the government disposed of 155 failed savings and loans over the last three months at a projected cost to the taxpayers of about $15.4 billion.

That task proved more costly than expected. Buyers were not willing to pay as much as hoped for thrifts that had been operating as wards of the government for many months and in some cases years.

The new strategy was approved yesterday by the board of the Resolution Trust Corp., which is made up of Seidman, Comptroller of the Currency Robert Clarke, Office of Thrift Supervision Director Timothy Ryan and FDIC board member C.C. Hope.

The plan was worked out in close cooperation with the OTS -- which is responsible for shutting down failing thrifts -- and the RTC -- which has to clean them up.

The policy change still needs formal approval of the RTC Oversight Board, the cabinet-level agency that has ultimate responsibility for the cleanup.

The Oversight Board staff has been in on development of the new plan, which is in line with the Bush administration's broad game plan for resolving the thrift crisis.

Even after closing down or selling 155 thrifts in the last three months, the government has cleaned up only 202 failed S&Ls since the cleanup bill was passed by Congress and signed into law by President Bush last August.

The RTC still is managing 247 thrifts that will have to be sold.

In addition to the 259 savings and loans expected to require a government rescue in the next 12 months, another 315 associations are in financial trouble and are also likely to require government help.

Congress has been pushing the administration to find faster and cheaper ways to get the job done. Congressional staff members cautioned yesterday that it remains to be seen whether the new strategy will work.

Potential S&L buyers also gave the new strategy mixed reviews.

Keeping institutions operating in private hands certainly ought to make them more attractive to investors, said Philip Weintraub, president of National Capital Group, a Washington firm that is working with private investors to buy thrifts from the government.

"Our view is you need to keep the existing management in the strongest possible position in order to attract the capital," Weintraub said.

But he cautioned that it will still be difficult for government to accomplish its goal of using public competitive bidding to sell privately owned and operated institutions.