The Mug-N-Muffin restaurant, whose "bottomless cup" warmed caffeine-swilling students and shivering street people alike, closed abruptly yesterday morning.

"There were people who were getting ready for work who got called at 5 a.m. and told not to come in," said waitress Sherry Marshall, a three-year veteran of the Harvard Square coffee shop. "[The management] was very cruel about it."

According to former staff members, employees had been told the restaurant would move to a new location in September because of nearly doubled rents at the Cambridge site. However, said Marshall, "they would not admit to closing a month early and they would not admit to just laying everybody off"--until yesterday morning.

Staff members said that a Bank of Boston branch may succeed the restaurant. The owners of the Cambridge restaurant and the owners of the Mug-N-Muffin franchise could not be reached for comment yesterday.

The Mug had been at its Square location since Christmas Eve of 1979. It served basic diner food to tourists, students, and working people, specializing in hearty, greasy breakfast fare.

According to Marshall, the Mug was cited for 18 health violations this winter, and a student who had seen the kitchen recalled rats, flies, and uncovered salad dressing. Both management and employees changed frequently.

Street people knew the Mug as the source of the "bottomless cup," where 68 cents worth of coffee on a cold day was permitted to last longer than anywhere else in the Square.

John Prisinzano, who lived on the street until recently, said the Mug would often give free coffee to "steady customers" who could not afford it. He said that although the store did not officially open until 6:30 a.m., "they'd let you in at 6 a.m. if you want to sit down." Homeless people who had been turned away from packed emergency shelters, and had spent the night walking to keep warm, gratefully did so.

Prisinzano said he had been surprised to see the doors locked when he arrived for breakfast yesterday morning, before going to his current job. "So I had to drink my coffee around the corner," he added. "Now there's nowhere else to congregate," he complained. "I'm going to miss this old place--I don't know where to go now in the morning."

Danny Sullivan, a Somerville native who has also spent time on the streets, said he had outstayed his welcome once and been evicted on a winter night. However, he also eulogized the shop. He said the Mug was preceeded by "Hungry Charlie's," which featured a free-for-all buffet breakfast.

A summer school student, Diane Smothers worked part-time at the coffee shop until yesterday. She said she wouldmiss the atmosphere. "A lot of college studentswould come in and they would sit and read and dotheir homework all night," the South Carolinanative said. "Some old ladies and some oldguys--they come in every night. They don't plan tomeet there--they just meet. I don't know wherethey'll go now. Where else can you get free coffeerefills?"

Marshall echoed her concern. "That's what thecustomers are saying to me: where are we going togo? It's not just the employees."

A manager at the Ruggles' English Pizzarestaurant on Massachusetts Ave. denied numerousspeculations that the coffee shop would replacethem as tenants. "We have a ten-year lease, so youshouldn't be asking us questions," he said,refusing to comment further. It is unclear whetheranother Mug-N-Muffin franchise will be opened inthe area