Harvard has agreed to end a decade-old dispute with Cambridge by paying for past repairs of chronic leaks in the Cambridge St. underpass, which the University built in 1965.

According to the terms of an out-of-court settlement negotiated during the last five years and signed by both parties last week, the University will pay Cambridge more than $151,000--enough to completely cover the cost of extensive structural alterations made to the bridge between the Yard and the Science Center in the mid 1970s.

"Harvard realizes, now that Proposition 21/2 is here, that they have a responsibility to the city, so they came up with the money," city solicitor Russell Higley, who negotiated the settlement for Cambridge, said last night.

Within three years after the University donated the underpass to the city in 1965, the bridge began to leak "drastically" during every rainstorm, forcing city employees to pump out thousands of gallons of water, public works commissioner Conrad Fagone said.

In legal depositions filed since the city began a suit against Harvard in 1976--one year after Cambridge made final repairs to the bridge--city officials charged that Harvard knew about the structural deficiencies when it relinquished ownership of the underpass, Highly said. He added that Harvard has for the past decade denied prior knowledge of the leak.

Okay, We'll Pay

Lewis A. Armistead, assistant to the vice-president for government and community affairs, said last night that Harvard now believes the city's request for damages was "legitimate." "We sat down and found we could agree on that," Armistead said, adding that "these sort of things take time."

If the settlement had not been reached, the city's suit would have gone to trial in January and lasted at least one month, Higley said.

City Council members said last night they plan to use the settlement money to add 30 beds to the municipally owned Neville Manor Nursing Home, located on Concorde Ave., near Fresh Pond.