Civil libertarians objected to the construction of buildings with religious affiliations on land owned by the Port Authority, the bistate agency that operates the airport.

Previously, he led the Port Authority for almost eight years and was widely regarded as having transformed a sluggish bistate agency into an energetic vehicle for regional economic improvement.

Meanwhile, Continental Airlines is in discussion with the city about building a training and administration center on its 177 acres owned by the airline and leased to the bistate agency.

And that benefit, New York officials said, was just one example among many of how New Jersey received more than its share of funds from the bistate agency.

By tradition, the governors of both states have three options on actions by the bistate agency.

In doing so, Mayor James agreed to drop one council-initiated lawsuit, and settle a second one, that had sought nearly a billion dollars for the airport from the bistate agency.

Either way, the event was likely to intensify the tensions between City Hall and the bistate agency.

The speeded-up process approved by the commissioners of the bistate agency seeks to finish by 2009 rather than 2016 the projects intended to keep the port competitive.

Many residents and a number of city officials had opposed the Port Authority as a developer because they believed the city could not exercise control over the powerful bistate agency.

The 50-acre development area will revert to the city once the bistate agency recoups its investment.