Britain OKs plan to cut size of its EC payments

Prime Minister Margaret Thatcher's Cabinet decided Monday to accept a plan worked out in Brussels last week to solve the dispute over British payments to the European Community budget, officials said. The deal cuts British payments to the Common Market budget by about two-thirds.

Britain, during 18 months of controversy, fought against its estimated 1980 contribution of $2.5 billion to the nine-nation Community's budget. Mrs. Thatcher insisted the payments be slashed because Britain had the third- lowest gross domestic product in the Community but was being asked to make the second-largest contribution.

Under the formula worked out at a meeting of Common Market foreign ministers in Brussels on Friday, Britain would now pay only $836 million during 1980 and $ 1.03 billion in 1981. If the other eight governments endorse the Brussels accord, it will receive formal approval at the next Common Market summit in Venice June 12 and 13.

West Germany will have to pick up most of the bill for the cut in British payments, and Chancellor Helmut Schmidt's Cabinet is due to make its decision on Wednesday.