UC Berkeley has dropped its controversial plan to build a dormitory on "People's Park" and will lease much of the property

a symbol of student radicalism and haven for the homeless--to the city of Berkeley as open space, according to an agreement signed this week.

A still undetermined portion of the 2.8-acre plot behind Telegraph Avenue will be kept under University of California control for recreation and informal sports. But the rest will be rented to the city for one dollar a year for at least the next five years, with the likelihood of lease extensions, officials said. The campus has taken the proposed 200-bed dormitory out of its long-term plans through the year 2005.

"I think it is exceedingly necessary for the city and the university to cooperate when it comes to that parcel of land," said UC Berkeley Chancellor Ira Michael Heyman, noting that the issue has been vexing officials for 20 years.

In May, 1969, one person was killed and dozens injured in a student confrontation with sheriff's deputies and National Guardsmen over a UC plan to build a soccer field on the site.

Heyman wanted to resolve the future of the park before he retires at the end of this school year, according to aides. Berkeley Mayor Loni Hancock said the agreement signed on Monday will prove to be "a great legacy" from Heyman.

"I think it's a great step forward both for the city, which needs the open space, and for the university," Hancock said. "We want it to return to being a park the entire community can enjoy."

However, both Heyman and Hancock cautioned that details remain to be negotiated and that a final settlement will require approval from the Berkeley City Council and the UC Board of Regents.

The park today is a troubled resting spot for the homeless, who frighten off some student passers-by. The university had hoped the dormitory would help reclaim the park from the homeless and drug dealers. Instead, the new plan calls for the university and city to work together on building a multiservice facility for the homeless on other UC-owned land in southwest Berkeley and to encourage the construction of low-cost housing in the city.

Hancock stressed that even such measures will not mean all the homeless will leave the park. More federal and state funding for mental health centers, job training and housing is needed to help the homeless, she said.