For three months, Annapolis has been caught in a paper chase that's frustrated the environmentally correct.

But city leaders believe they now have at least a stopgap solution for residents who want to recycle their stacks of yellowing newspapers.

The City Council's finance committee yesterday gave a nod of approval to setting up a large drop-off container until newspapers can beincluded in curbside recycling. Public Works Director John E.C. Patmore said he expects the bin could be installed within 10 days once the mayor authorizes the contract.

Annapolis stopped taking newspapers at its recycling center on Spa Road two summers ago when the program's costs surpassed the revenue from all recyclables. Several Giant Food stores picked up the slack until Jan. 1, when they abruptly ended newspaper recycling.

Flooded with complaints from recycling fans, city officials announced they were soliciting bids to set up a drop-off bin. In mid-February, three private trash haulers submitted proposals.

One of the companies, Eastern Waste Industries Inc., not only underbid the others, but also offered a deal to begin curbside newspaper recycling in exchange for a $20 cut in tipping fees.

Mayor Alfred A. Hopkins and members of an ad-hoc refuse committee at first called it a "win-win" proposal.

But another company, Browning-Ferris Industries, accused the city of offering its competitor a "sweetheart deal."

The Eastern Waste proposal failed in a tie vote earlierin the week. Several aldermen who had supported the deal earlier said they changed their minds after hearing it might violate Annapolis' purchasing policies.