In an age of government cutbacks, Los Angeles County and its cities and school districts are increasingly fighting over one of the few sources of funds that continues to expand: redevelopment.

Frustrated school and county officials watch a growing percentage of their property tax money diverted to city redevelopment projects, which use the money to attract office buildings, shopping centers and auto malls.

Agencies that provide welfare, health care, schools, libraries, fire stations and other services lost $335 million in tax allocations last year to 63 cities that have redevelopment projects, County Auditor Controller Daniel Ikemoto said. Six years earlier, redevelopment drained $189 million from government budgets.

As a result, Los Angeles County has sued 10 cities in the last 22 months, charging that the redevelopment projects are improper. Local school districts have tacked on an uncounted number of similar suits.

At stake in the burst of litigation--which includes pending lawsuits against Bellflower, Duarte and Hawthorne--is how the spoils of new economic growth should be divided among governments.

Cities say they should get most of the money to continue the work of redevelopment: building storm drains, replacing street lights and buying run-down, hodgepodge parcels to be packaged together in large tracts to attract even more development. Critics say cities should be forced to share a greater percentage of redevelopment money with other government agencies, which must provide more classrooms, more public health programs and more fire service with less tax money.

"If it keeps going, redevelopment will swallow up state and local government taxes," said Christopher Sutton, a Pasadena attorney and frequent redevelopment critic. "The (redevelopment) agency budgets are really like fat little pigs floating in the shark tank right now."

The state Legislature came up with the concept of redevelopment in the 1950s, but the process didn't really take off until the passage of Proposition 13. The 1978 tax-cutting measure left cities with few avenues whereby to expand their revenues, except redevelopment.

It works this way:

Cities designate blighted tracts of land as redevelopment project areas. Properties within the special areas can be condemned and, sometimes, combined with other properties to form parcels big enough for larger developments. Often, cities lure developers by offering land in the redevelopment area at cut rates.