Democrats who control the House last night brushed aside bitter Republican opposition and passed the first major overhaul of congressional campaign finance laws in over a decade.

Responding to the escalating costs of political campaigns and public disgust with special interest money that they fear could turn into anti-incumbent sentiment, House members adopted the hastily crafted finance package on a vote of 255 to 155.

The legislation would encourage House candidates to voluntarily limit their campaign expenditures and would put a ceiling on how much they may accept from the thousands of Political Action Committees (PACs) that have grown to dominate the congressional campaign system.

The House rejected proposals by more reform-minded Democrats that would have further restricted the influence of PACs, provided for limited public financing, and halved the current $1,000 limit on individual contributions. That proposal was sponsored by Rep. Mike Synar (D-Okla.) and Rep. David R. Obey (D-Wis.).

A competing Republican plan that would have cut the maximum PAC contribution to a candidate from $10,000 to $2,000 and required House candidates to raise at least half of their money from residents of their districts while tilting the system in favor of party spending, was defeated by a lopsided margin, 241 to 169.

In approving the Democratic campaign finance overhaul, the House followed quickly on the heels of the Senate, which on Wednesday passed its own, far different version. But both proposals contain voluntary spending limits on congressional campaigns that the White House has said will provoke a presidential veto, making final enactment into law unlikely.

The finance package, which was frantically revised in private meetings as late as Thursday night to accommodate incumbent Democrats, was attacked by Republicans as a partisan revision designed to perpetuate the Democratic Party's 36-year stranglehold on control of the House.

GOP lawmakers lambasted the legislation as a measure that penalizes challengers through spending limits and would continue the dominance of special interests -- such as labor unions -- that traditionally support incumbents and Democrats.

Rep. Jim Leach (R-Iowa) accused Democrats of ignoring the lessons of the savings and loan industry collapse and its financial influence on Congress. "The majority party continues to put its head in the trough of political piggery," he said.

Calling the legislation a "sham and a shame," Leach said Democrats believe "the system that produced the biggest scandal in American history {should} be tinkered with rather than reformed, and tilted to favor the same incumbents who let America down."

But Democrats defended their plan as meeting three key tests of reform: cutting overall costs, putting a ceiling on PAC influence, and encouraging small contributors through a tax credit.

Noting that the average cost of House campaigns has doubled since 1980, Rep. Al Swift (D-Wash.), the chairman of a Democratic task force on campaign reform, said: "Without a spending limit, the cost of campaigns has gone wild. . . . This great rush of money into the election process has brought on a rash of problems."

The House Democratic package would establish voluntary spending limits for House candidates of $550,000 per election cycle -- $715,000 if a candidate wins a primary with less than two-thirds of the vote -- and would subsidize mail and television advertising costs as an incentive to comply with the limits.

It would limit a candidate's total PAC contributions to $275,000. It would also cut the maximum contribution to candidates from PACs that rely on large donations from $10,000 per election cycle to $2,000. Small-donor PACs, most of them run by organized labor, could still give $10,000.

In addition, the legislation gives small contributors to candidates who abide by the spending limits a special break: a 100 percent federal income tax credit of up to $50 per individual or $100 per couple filing jointly.

Finally, the bill tightens restrictions on so-called "independent" expenditures, "bundling" of campaign contributions and use of "soft money."

Those provisions would seek to ensure that there is no coordination between a candidate and an independent campaign launched against his opponent; prevent intermediaries from "bundling" individual contributions and funnelling them to candidates; and ban use in federal campaigns of "soft money," or contributions to parties that are not subject to federal restrictions. Soft money is increasingly used for such activities as get-out-the-vote drives that benefit specific candidates. House Campaign Spending Bill

Here are the key provisions of Democratic-sponsored legislation to overhaul campaign finance laws passed by the House last night:

Voluntary spending limits of $550,000 per House candidate per election cycle, with incentives to encourage participation that include lowered broadcasting and mail costs and tax credits for small, in-state contributors to candidates who comply with the limits. Of the $550,000 total, $300,000 could be spent in a primary. Candidates who win a contested primary with less than two-thirds of the vote would be able to spend an extra $165,000 above the $550,000 limit. The spending limits would be lifted for a candidate whose opponent does not comply with the voluntary restrictions and who raises or spends more than $200,000.

Political action committee (PAC) contributions to any candidate, whether or not he complies with voluntary limits, would be restricted to $275,000 per election cycle. PACs that collect individual contributions of $240 or less from members may continue to contribute up to $10,000 per candidate per election cycle, but PACs that do not meet that small donor requirement could contribute only $2,000.

Rules governing "independent" expenditures on behalf of candidates would be tightened to prevent any coordination with the candidate's campaign. Ads paid for by an independent expenditure must carry a disclaimer identifying the organization responsible for the payment.

"Soft money," or funds generally channeled to federal and state parties for such activities as get-out-the-vote drives, could not be used in an activity that specifically mentions a candidate for federal office. Presidential candidates would also be prevented from soliciting or receiving soft money.

So-called "leadership PACs" -- which members of Congress use to donate to other candidates -- would be banned.

Televised campaign advertisements must include a prominent image of the candidate and a statement that the candidate takes full responsibility for the ad's content.