NATO to Scrap Plans for New Short-Range Missile : Military: Alliance officials also rule out a 3% boost in members’ levies. A reduced Soviet threat is cited.

Senior officials of the North Atlantic Treaty Organization said Monday that a controversial plan to develop a successor to the Lance missile for deployment in West Germany will be scrapped.

The officials said that such a weapon is not likely even to be built by the United States.

Also on Monday, NATO diplomats said that a 3% annual increase in the defense budgets of member countries, a goal the major alliance powers have sought for years, is no longer appropriate.

These developments can be attributed, the officials said, to the reduced level of the Soviet threat to Europe. Neither has been formally announced. The officials indicated that they are waiting for an opportune moment, and one suggested that this could come in the weeks just ahead.

In Washington, a U.S. official refused to give a direct reply when asked about the NATO officials’ remarks. He said a wide variety of informal proposals are under consideration.

The plan to develop a successor to the Lance, a battlefield support missile that can carry a nuclear warhead, has encountered sharp opposition. A meeting of NATO officials came close to collapse here last year when the United States and Britain supported the plan but ran into stiff opposition from West Germany and other members of the alliance.

The dispute was smoothed over when the alliance agreed to put off a decision until 1992. Now, according to experts here and in Bonn, the situation has been overtaken by events in the Soviet Union and Eastern Europe, where in recent months one Communist government after another has given way to a more representative form of government.

“If the threat is no longer there,” one NATO official said, “we have to adjust to the new realities.”

U.S. Secretary of Defense Dick Cheney has asked Congress to approve slightly more than $112 million to develop a replacement for the Lance. But pressure is being put on Congress to reduce the defense budget.

A U.S. official here, asking not to be identified by name, said: “There is no point getting the Germans upset about a nuclear missile for which Congress is not going to appropriate funds anyway.”

And in Washington, a group of congressional leaders, scholars, former government officials and retired military officers said the money sought for a new battlefield support missile “would be better spent elsewhere.”

The group, a forum sponsored by the Johns Hopkins Foreign Policy Institute, said the so-called U.S. nuclear umbrella in Europe and the presence of U.S. troops in Europe will serve U.S. interests “for years to come.”

The Lance has a range of about 80 miles. The proposed successor would be able to reach targets more than three times as far away. There are 88 Lance launchers and about 700 warheads in West Europe, most of them in West Germany.

Turning away from the 3% annual increase in defense budgets would make life easier for the governments of the 16 nations that make up the alliance. For years the alliance has been committed to this goal, but popular opinion in most European countries has been against it, and few governments have managed to achieve it regularly.