BOSTON--In the second week of debate on a bill aimed at reducing the state's $730 million deficit, the House of Representatives yesterday scrapped a $46 million initiative to reclaim beverage deposits.

The initiative--part of a $401 million package of budget cuts and new, non-tax revenues--would have forced the bottling industry to give the state money from unclaimed bottle and can deposits. Currently, companies hold aside deposit money in a separate fund and dole it out to stores when they return the empty containers.

Rep. Robert A. Havern (D-Arlington) said the House did not back the idea because many representatives doubted whether the $46 million figure were correct. He said the money would also be difficult to collect.

But yesterday's decision to drop the initiative will make it even more difficult to deal with the fiscal deficit without raising tax revenue, said Rep. Charles F. Flaherty (D-Cambridge), the House majority leader.

Democrats said yesterday they expect the House to consider proposals for new taxes before the end of the year to make up the difference between the House package and the total deficit.

Last week, representatives added amendments to the bill to reduce the deficit by $40 million.

But Flaherty said that as a result of yesterday's proceedings, "What ever we did last week is wiped out."

Debate will continue all week, and House members hope to vote on the final package next week.

If approved, the bill will be sent to the Senate, where it will likely undergo further alteration. A conference committee will then hammer out differences between the two versions and return the new bill to the House and Senate for final approval.

The original budget package, approved by the House Committee of Ways and Means last week, contained some $130 million in spending cuts, $88.7 million in savings initiatives and $122 million in non-tax revenues. That package incorporated cuts in all branches of state government, including $25 million cuts in the higher education budget and $5.5 million in the Department of Education's budget.

Initiatives aimed at raising state revenue include a Medicaid reform package, a cap on additional benefits for welfare recipients and assessments of college trust funds.

Flaherty said the only two ways to realize the $330 million discrepancy are cuts in essential state programs or new revenue.

"I think [a tax package] will have to be proposed," Flaherty said.

"I refuse to think we're going to be cold enough to cut further into essential services," Havern said. "But who knows, these are funny times."