Initiative to halt local nuclear-weapons development fails in Cambridge, Mass.

A controversial initiative that might have made this university city along the banks of the Charles River a nuclear-free zone has been soundly defeated. If the initiative sponsored by the Cambridge office of Mobilization for Survival had become law, it would have prohibited any new research, development, testing, or production of nuclear weapons in the city of Cambridge. Violators would have been fined up to $5,000 and could have been sentenced to 60 days in jail for each infraction.

The outcome of the Nov. 8 vote was not known until late Friday, when the arduous process of counting Cambridge's paper ballots was completed. Cambridge City Auditor Al Giroden said the final count was 17,331 (59.7 percent) against the question and 11,667 (40.3 percent) in favor.

Although about 60 Cambridge firms were targeted when Mobilization for Survival's campaign got off the ground in late summer, the group's focus eventually narrowed to the Charles Stark Draper Laboratories Inc., a Vietnam war-era spinoff of the Massachusetts Institute of Technology (MIT).

Draper Labs holds $100 million in United States Defense Department contracts to design guidance systems for the MX, cruise, and other missiles that carry nuclear warheads. About 1,500 of Draper's 1,800 employees would have been affected had the initiative passed.

Joseph F. O'Connor, vice-president of Draper Labs, said Saturday, ''We are very pleased with the outcome. When all the arguments were made, the people of Cambridge felt it was a bad law.'' The result, he added, was ''a great change from June when Draper ran a poll to find out people's awareness of the issue. At that time it was 2 to 1 in favor (of the initiative).''

Mr. O'Connor also pointed out that ''when (Harvard University president Derek C.) Bok and (MIT president Paul E.) Gray came out in opposition, the liberal elements of the city who support a nuclear freeze . . . felt less guilty about voting against the initiative.''

Mobilization spokesman Richard Schreuer, a graduate student at Boston's Northeastern University, could not be reached over the weekend. He was quoted by wire services as saying the attempt would be made again in two years, and that the message from the number of ''yes'' votes, while not as powerful as the group had hoped, had been sent to Washington.