Planning work on the City's $7.5 million Cambridgeport Urban Renewal Project has come to a virtual standstill pending State decision on the location of the Inner Belt Highway through the eastern part of Cambridge.

Members of the City Council were advised yesterday by the Redevelopment Authority that Cambridge stands to lose $4,980,000 in Federal aid for the project unless workable plans are submitted by Oct. 4. But the Federal government has also cut off planning funds until the belt route is settled.

Council action was stalled for two weeks on a resolution that would ask the Federal authority to unfreeze planning funds so that local planners can work with the State and Federal governments in deciding the best location for the road. Councillor Charles A. Watson, who doesn't think the road needs to go through the city at all, exercised his "charter right" to have the matter put off.

Watson said he felt the highway would displace a particular class--the large, low income family--and charged that members of the Citizens Advisory Committee, "from the Presidents of the Universities on down," were not working in best interests of the city in urging cooperation on the road planning. President Pusey is a member of the Advisory Committee.