Until Harvard unexpectedly reversed its decision not to renew the lease of the Yenching Restaurant yesterday, the landmark Chinese eatery in Harvard Square was headed for extinction.

Yenching has stood at the corner of Mass. Ave. and Holyoke St. for the past 20 years and has been a tenant of the University since Harvard acquired the building from a private owner 15 years ago.

Yenching's lawyer, Peter L. Cohen, said that Constance T. Smith, Harvard's assistant vice president for commercial leasing, marketing and business planning, informed the restaurant's management in September that its lease would not be renewed.

According to Cohen, Smith refused to say why the lease would not be extended and did not indicate Harvard's future plans for the property.

In addition, Cohen said Harvard would not allow the Yenching Restaurant to compete with other businesses for the space.

The Yenching has always paid its rent promptly, according to S.T. Lung, one of the restaurant's owners. He said Harvard had never previously shown any displeasure with the Yenching.

The about-face yesterday by the University will allow Yenching to remain at its current location.

Robert E. McGaw, a University attorney who is representing Harvard Planning and Real Estate (HPRE), told the Yenching yesterday that Harvard was interested in offering a new five-year lease, according to Cohen.

McGaw gave no reason for Harvard's sudden change in position, Cohen said.

"We have indicated to [Yenching's management], through their attorney, that we do want to talk to them about resolution of problems which arose during the current lease period and options to solve these problems and move forward with them continuing in the space," HPRE Director of Physical Planning Kathy A. Spiegelman said in an e-mail message yesterday eve-ning.

Spiegelman also confirmed that Harvard has offered to renew the leases of many other tenants in the same building.

While Harvard officials gave no reasons for the extension of the Yenching's lease, a petition to President Neil L. Rudenstine circulated by the restaurant may have influenced the University's final decision.

Lung said the petition, which objects to Harvard's "high-handed" behavior and calls for "equal treatment," had already been signed by a Nobel laureate.

"We're cautiously optimistic that this will lead to a good outcome for the Harvard community," Cohen said this evening