ASHINGTON, Jan. 22 The Bush administration intends to announce a new plan on Wednesday to dispose of surplus American nuclear weapons fuel, rejecting in part a 1996 plan by the Clinton administration as too costly.

Under the new plan, 34 tons of plutonium will be converted into fuel for nuclear reactors. Under the Clinton plan, 8 tons of it was to be ruined by mixing it with the waste created when the plutonium was produced. The Clinton administration decided to pursue both routes because it was not certain that either one was technically feasible and it was eager to ensure that it had at least one method. But a senior administration official said this evening that dropping the second method would save almost $2 billion.

The decision was a blow to opponents of nuclear proliferation, who say that using recycled plutonium in power reactors will send the wrong message to countries the United States is trying to dissuade from purifying plutonium.

Most plutonium is produced in power reactors, and if it is purified from spent fuel, it can be used in reactors again, but it can also end up as weapons fuel.

Others say the plan will at least preserve the heart of an agreement with the Russians to destroy a like amount of their bomb fuel.

Energy Secretary Spencer Abraham is expected to argue that the new strategy is central to enhancing national security and advancing nonproliferation goals, the senior official said, and that it is technologically possible and affordable.

At the Nuclear Control Institute, a nonprofit group based here that seeks to prevent the spread of nuclear weapons materials, Tom Clements, an expert on plutonium, said that turning the material into reactor fuel would put plutonium into the commercial world, a security risk. And it will make it harder to discourage other countries from recovering plutonium and reusing it, Mr. Clements said. His organization and others have said that the conversion raises technical and environmental challenges and that the Energy Department has a poor record of solving such problems.

But it may solve a political problem. In South Carolina, Governor Jim Hodges, a Democrat, said the plan "sounds promising." Last summer, believing that the department was planning to ship plutonium to Savannah River, near Aiken, S.C., without a plan to dispose of it, Mr. Hodges threatened to use state troopers to turn the Energy Department's trucks around at the state's borders.

Nearly all the money for the project will be spent in South Carolina, which will make the decision popular locally.

The department plans to pay the Duke Power Company to use two of its twin-reactor plants, Catawba, in Clover, S.C., and McGuire, in Cornelius, N.C., to take the plutonium as fuel. But to do so, Duke must win license amendments from the Nuclear Regulatory Commission, and it already faces opposition.

Mr. Clements's organization argues that an accident in a plant using plutonium fuel could release more dangerous materials than one at a plant using uranium fuel.

The senior Bush administration official said that "while people may be enthralled with immobilization, if you want to do something that keeps the Russians to their commitment, this is the way to do it."

Cost estimates have varied wildly. The 1996 estimate was $2.3 billion, but by last summer the estimate was $6.6 billion. The administration will say on Wednesday that eliminating immobilization will save nearly $2 billion and cut the total cost to $3.8 billion, the senior official said.

The Clinton plan was to dispose of 52.5 tons, more than half the national stockpile, but that was reduced to 34 tons. Some of the plutonium that was to have been mixed with wastes is unsuitable for conversion to fuel; the administration will have to find two tons of weapons plutonium to satisfy the agreement with the Russians.

The new plan is to build two factories at the Savannah River site. One will take plutonium "pits," the heart of nuclear warheads, remove gallium, an element with which it is alloyed, and convert it from a metal to an oxide form. A second will mix the plutonium oxide with oxides of uranium and turn that into ceramic form, the common form for commercial reactor fuel. The product, mixed oxide fuel, known as MOx, is used in Europe and Japan, but plants have had technical problems, and MOx is far more expensive than uranium.