The combatants in the fight over the city’s education financing are worried about three things: how much more money the school can get, how quickly can they get it, and how to hold the system accountable.

Now, after an 11-year court battle, Governor Pataki, the defendant in the original suit, and the Campaign for Fiscal Equity, the plaintiffs, are negotiating an accountability agreement they hope to have in place by September 23.

The disclosure came yesterday at the first hearing held by the court-appointed “special masters.” The three referees, appointed by New York State Supreme Court Justice Leland DeGrasse in July, will advise Judge DeGrasse on how best to rework the state’s funding formula to ensure more money for New York City school children.

If an agreement can be reached, CFE attorney Michael Rebell said, “That’s one less thing for them to decide. But accountability is very important to everyone involved.”

The centerpiece of the negotiations is the “comprehensive plan” that would be required of the city and state departments of education. The plan would detail how the money would be spent to improve student performance as measured on state and citywide exams. Mr. Rebell would not get into the details of the negotiations, but he seemed optimistic.

Public arguments presented by the city, the state, and the CFE yesterday skirted the subject to prevent from upsetting the discussions.

The panel has five proposals for how to add money to the city’s education budget, one each from the Assembly, the Senate, the governor, the city, and CFE. Most propose adding $4.7 billion to $5.6 billion to the city’s annual operating budget of about $12 billion. How much of the extra money will come from city or state coffers was the white elephant in the room throughout the morning.

Lawyers for the state reiterated their argument that the panel has only the limited authority to either accept or reject the proposal from the governor, not to consider plans from other groups or agencies.

The panel took a dim view of that idea.

“This is a constitutional crisis that the courts have to remedy,” said one panel member, retired judge E. Leo Milonas.

New York City’s Corporation Counsel Michael Cardozo asked the panel to strike down tenure for teachers and regulations that make it difficult to move teachers between schools. The panelists expressed little interest in, as another panelist, retired judge William Thompson Sr., put it, “micromanaging the schools.”

The CFE was able to present itself as a middle ground, offering a moderate plan backed by an 18-month study on school needs. The Court of Appeals found the state’s funding system unconstitutional in 2003 and gave the Legislature a year to develop a new plan.

After a year of bitter conflict in which both houses of the Legislature and the governor put forward plans that were rejected by the others, Judge DeGrasse took the case back and appointed his three referees with a deadline of November 4.