After months of aggressively defending the view that he did not need approval to earmark $300 million of city money for a football stadium on Manhattan’s far West Side, Mayor Bloomberg reversed his position yesterday.

Three weeks after a state board rejected the stadium proposal, Mr. Bloomberg agreed to back a bill that requires City Council approval for mayors to use so-called PILOTs – payments in lieu of taxes – to finance development and construction projects throughout the city.

The about-face averts a court battle in the months leading up to November’s mayoral election, and it mollifies good-government groups and elected officials who suggested the administration was trying to avoid public scrutiny for a pet project it did not want to put up for a vote.

“This is a victory for fundamental principles of good government,” the council’s speaker, Gifford Miller, told reporters during a news conference. “But more important, it’s a victory for New York’s taxpayers, because it assures that every single dime of taxpayer money will go through the publicly elected Legislature and receive full public approval.”

The mayor’s retreat did allow Mr. Miller, who is vying for the Democratic Party nomination to challenge Mr. Bloomberg, to declare victory yesterday on an issue he seized upon and generated momentum for. Yet while Mr. Miller – who has said the mayor was attempting to use public money as a “personal slush fund” – got his wish for more council oversight for the city’s use of PILOTs, political experts said changing course was a smart political step for Mr. Bloomberg. It was, they said, an attempt to end a battle with a political opponent that could grab headlines and stick with voters.

“It was a strategic political move,” a political consultant, Norman Adler, said. “The mayor is a shrewd tactician. He has chosen peace over war.”

“This is a mayor who doesn’t mind people thinking that he has backed down,” Mr. Adler said. “Rudy Giuliani was different. He couldn’t stand that thought of even one person in the city believing that about him.”

According to the council, the new bill is a modified version of one the mayor vetoed this month. It requires all money collected from PILOTs to go into the city’s general cash pool, but, unlike the previous bill, it allows the mayor to request approval to use some of that money for a specific project, such as a stadium.

Until early February, even some policy wonks in City Hall did not fully understand how PILOTs were used for development projects in the five boroughs. It was at a council hearing then that the director of the mayor’s management and budget office, Mark Page, divulged Mr. Bloomberg’s plan to use the money that the city collected from developers’ PILOTs to pay $300 million over 30 years for the platform over the Hudson Rail Yards on which the stadium would be built. Mr. Page and the deputy mayor for economic development, Daniel Doctoroff, who is also the mastermind behind the stadium proposal and the city’s 2012 Olympic bid, insisted the mayor had the authority to do so unilaterally.

The revelation of how Mr. Bloomberg planned to pay for the stadium upset even council members who supported the project.

“Some people portrayed this as an anti-stadium thing,” the chairman of the council’s finance committee, David Weprin of Queens, said. “I obviously was a strong supporter of the stadium; the speaker was obviously a strong opponent. But regardless of your position on the stadium, there was no doubt that the City Council clearly had jurisdiction.”

A spokesman for the mayor, Jordan Barowitz, issued a statement yesterday, saying: “This is a reasonable compromise that avoids litigation, provides the administration with the autonomy necessary to move forward on essential economic development projects and increases public input into the PILOT process.”

That, however, seems to contradict the mayor’s previous arguments. In his June 9 veto letter to the city clerk, the mayor said the council’s bill would “impair the ability of the city and state entities to spur vital economic development in the city.”

The city’s corporation counsel, Michael Cardozo, also told a council committee in April that the previous bill violated state law and the City Charter.

Yesterday his office referred queries to City Hall.

The executive director of the Fiscal Policy Institute, Frank Mauro, who was director of research for the 1989 Charter Revision Commission, said the development was a “good thing.”

“This is about much more than the stadium,” Mr. Mauro said. “The stadium is just what exposed this, but this has been going on for years.”