Maryland's Glen Echo Park has fallen on hard times.

The park was saved in 1971 from what many feared would be incompatible commercial development when the site was acquired by the National Park Service. But its supporters once again are seeking massive financial infusions to keep the park's prime real estate and its dilapidated historic structures out of the hands of private developers.

"We have to come up with a plan to generate revenues that would normally come from the federal government," said John Byrne, U.S. Park Service superintendent of the George Washington Memorial Parkway, under whose budget authority Glen Echo falls.

Byrne said operating the park costs $210,000 annually and that "millions more" are needed to "keep the buildings from falling down."

With the prospect dim for increased federal subsidies, the Park Service began searching last month for a developer who could lease the park and make it pay for itself.

But when nearby residents first heard of the Park's Service's plan to seek development proposals from a wide spectrum of private and public foundations and commercial developers, they became alarmed and decided to start their own campaign to save Glen Echo.

"Our short-term goal was to delay the Park Service's requests for development proposals , and our long-term goal was to form a public foundation to come up with the renovation money," said Diane Leatherman, chairman of the fund-raising group.

Leatherman and her colleagues are veterans of the successful zoning fight in 1970 to keep high-rise buildings off Glen Echo's bluffs overlooking the Potomac River and are wary of any effort that may threaten the unique artists' colony and community cultural center that has sprouted since then.

"There are some 50 artists that teach there," she said. "About eight, including a master puppeteer, potters, sculptors and painters are permanent residents. . . . We use every single building there, although some are very decrepit."

The Park Service has given the group the summer months to draft an alternative proposal and to begin to raise the $2.5 million needed to perform the most critical structural repairs.

Byrne said, "It is a misconception to say that the Park Service has planned something as crass as turning Glen Echo into a shopping center. We welcome any proposal for the arts that would make money. We do need a huge capital investment, but all proposals would have to be compatible with requirements for this historic site."

Saying it was wrong to assume that every cooperative joint venture with private developers would automatically spell the end of the park, Byrne suggested that a private restaurant or a conference center might be two possible revenue-generating facilities.

Conceived and marketed in the 1880s as an idyllic residential community perched on the bluffs overlooking the Potomac, Glen Echo never quite made it as a viable real estate venture despite several clever ploys by its early developers.

In one of the schemes designed to attract visitors and residents, developers Edwin and Edward Baltzley promoted the 80-acre area just off the George Washington Parkway and the C&O Canal as the site of the nation's 53rd Chautauqua in 1891, an educational and cultural program designed to promote the arts in rural settings.

But the Chautauqua was in full swing only two months when the rumor -- some say spread by rival real estate companies in Chevy Chase -- that malaria was ravishing the fledgling riverside community scared off potential visitors and settlers.

The Baltzley brothers eventually leased the site to an amusement park company, and from 1890 until the late 1960s the riverfront resort with its lovely vistas, huge ballroom, outdoor Crystal Pool, vintage carousel, Laff House and electrified Bumper Car Pavilion was a favorite of picnickers, daredevils, lovers and families.

Now the ballroom that once attracted thousands of dancing couples is in a dramatic state of disrepair, and the former Arcade is condemned.

Other buildings from this era are in need of major structural, electrical and mechanical repairs, according to a 1984 survey.

Frederick Kuster, mayor of the nearby town of Glen Echo, said the 230 residents of his town want to make sure they have some say in the future of the park. "We need to understand what is meant by a private developer," Kuster said.

Kuster said he has been approached by several developers, but no definitive plans have emerged yet.

The Park Service's Byrne said he would like to renovate Glen Echo in time for its 100th anniversary in 1991. Regardless of what improvements finally are approved, Byrne said the government is obligated to protect the Potomac Palisades near Glen Echo, its adjacent river valley and the historic significance of the grounds.

"We need to stabilize those buildings so they won't fall down, but there was never a plan on our part to close the park or alter its use," he said.