MOSCOW, JAN. 8 -- Lithuanian Prime Minister Kazimiera Prunskiene resigned today following rejection by the Baltic republic's legislature of her economic-reform package and months of disagreement with President Vytautas Landsbergis over government policy.

Prunskiene announced the resignation of her nearly two-year-old government shortly after legislators voted down her plan to raise prices on basic goods by up to 300 percent and just hours after meeting here with Soviet President Mikhail Gorbachev on Kremlin threats to round up draft evaders in Lithuania and other separatist Soviet republics.

With Moscow once more taking a stern confrontational stance toward Lithuania and the other two Baltic republics, some legislators in Vilnius, the Lithuanian capital, said they feared that the current political instability in the republic could be exploited by the Kremlin. "We've lost a rational, intelligent voice," said Arvydas Juozaitis, one of Prunskiene's supporters in the legislature. "This is the last thing Lithuania needs."

Meanwhile, in a move to smooth a potentially more volatile dispute between the central government and the country's biggest republic, Gorbachev signed an agreement on the 1991 Soviet budget package with Russian President Boris Yeltsin. After weeks of contention over the size of the Russian republic's contribution to the budget, the two sides reached a "mutual understanding" at a meeting today, according to Soviet media.

On the draft issue, Gorbachev held firm to his Monday decree ordering Soviet troops to begin rounding up thousands of young draft resisters in seven Soviet republics, telling Prunskiene that any further negotiations on the matter would have to go through the Defense Ministry. Residents of Vilnius said today that Soviet troops have been handing out flyers door to door declaring that conscripts must report to their units by Monday or be hunted down.

The Lithuanian legislature denounced Gorbachev's order, saying he had "pushed the armed forces of the U.S.S.R. to commit new crimes. It violates not only the laws of the sovereign Lithuanian republic and international law" but also Soviet law, which assigns draft-evasion cases to civilian courts.

The Supreme Council, as Lithuania's legislature is called, recommended that conscripts avoid the draft roundup by not sleeping at home. The legislature also said it would seek to protect citizens by appealing to international human-rights groups. Officials in the other two Soviet Baltic republics, Latvia and Estonia, denounced the roundup and said they would do nothing to assist Soviet military authorities.

In Vilnius this morning, about 5,000 pro-Moscow demonstrators rallied outside the legislature to protest the Lithuanian campaign for independence and Prunskiene's proposed price increases. Some demonstrators smashed a metal door to the building before police dispersed the crowd with fire hoses. President Landsbergis, using a loudspeaker, called on independence supporters to mount a counter-demonstration at the legislature building.

Prunskiene, an economist and a key leader of the Lithuanian independence movement, is the most popular politician in the republic, according to public opinion polls. In recent months, her popularity, as well as her willingness to find a language of compromise with Moscow, have caused friction between her and Landsbergis, who has taken a more radical line. In her resignation statement, Prunskiene said that she and the legislature, led by Landsbergis, have "conceptual differences."

"We began to differ for the first time in May and June," she said, "when the policy of negotiations with the U.S.S.R. was being formed. We avoided a crisis then, but now the time is again ripe for a crisis."

The Lithuanian legislature accepted the resignation of Prunskiene and her cabinet by a vote of 72 to 8, with 22 abstentions, but Prunskiene will remain in the post until a new government can be formed. Landsbergis made no comment on Prunskiene's resignation and did not say when he plans to nominate her successor.

Although both Prunskiene and Landsbergis support Lithuanian independence, Landsbergis has been far more willing to use emotional, confrontational language in that cause -- not only in his dealings with Moscow, but also with the West. When Landsbergis felt last spring that Washington was not supporting Lithuania strongly enough in its struggle with the Kremlin, Landsbergis compared Bush administration actions to the appeasement policy of Neville Chamberlain's British government at the Munich conference with Adolf Hitler. Prunskiene, in a meeting with President Bush, apologized for Landsbergis's remark.

In Washington, Moldavian Premier Mircea Druc, to whose southwestern Soviet republic draft-enforcement troops also are being sent, said:

"It is ridiculous to send additional troops to Moldavia. There are already two or three units in each city. . . . The latest directive will be ignored." Asked what would happen next, he replied, "Anything can happen." Druc said he is advising his people to take "a nonviolent, Gandhian approach and wait for the troops to go away."