Senate Republicans yesterday offered Democrats what they characterized as a major counterproposal to break the deadlock over campaign finance reform, including limits on spending from out-of-state sources but not on funds collected from individuals in a candidate's own state.

Democrats have insisted on spending limits aimed at restricting instate as well as out-of-state contributions. It was unclear last night whether the GOP proposal, in a letter from Minority Leader Robert J. Dole (R-Kan.) to Majority Leader George J. Mitchell (D-Maine), would break the deadlock.

Dole's proposal came as the Senate prepared to open debate on rival Democratic and Republican plans to overhaul campaign financing laws, with the major dispute centering on the Democratic demand for spending limits, which Republicans have resisted.

In his letter to Mitchell, Dole characterized the proposed limits as "flexible fund-raising targets," based on recommendations from a bipartisan panel of outside experts that he and Mitchell appointed early this year to suggest the outlines of a compromise.

While both leaders hailed the panel's report as a potential breakthrough, Republicans subsequently backed away from its proposal for "flexible" spending limits that would seek to curb out-of-state contributions while encouraging limited contributions from within a candidate's own state.

Under Dole's proposal, political action committees (PACs) would be banned and aggregate state-by-state "targets" would cap contributions from a candidate's personal funds, in excess of $250 from out-of-state individuals and from PACs if the proposed ban on them is ruled unconstitutional. Also, the limit on each out-of-state contribution would be reduced from the current level of $1,000 to $500.

To spur voluntary adherence to spending limits, candidates who abide by them could get reduced postal and broadcast rates.