Aides to Gov. Mario M. Cuomo this week said he will not appear in upcoming advertisements promoting the first issuance of mini-bonds by a New York State authority.

Controversy had erupted over advertising for the planned $50 million bond sale by the state Dormitory Authority of small-denomination debt under the New York State Savings Bond Program.

The outcry was triggered on Tuesday, the day state bond regulators approved the mini-bonds sale, when an official at the Dormitory Authority remarked "who better to pitch a statewide program" than Cuomo.

State Assemblyman John Faso, R-Kinderhook, who is running for state comptroller, termed any advertisement featuring Cuomo "a new method of campaign financing." Cuomo may run for re-election in 1994.

But aides to Cuomo said the governor never had any intention of hawking the new mini-bonds. They said the idea of using Cuomo came from James A. Lebenthal, who heads up the bond firm that will serve as senior manager of the transaction and oversee its $400,000 advertising campaign.

"From the very start, we didn't think he would do it," said Claudia Hutton, a spokeswoman for the state budget division, said of Cuomo.

The Dormitory Authority deal, set for February, would be the first issue of small-denomination debt under the Savings Bond Program. The program resulted from a November 1992 executive order by Cuomo that calls on state officials to make small-denomination state debt, such as zero coupon bonds or capital appreciation bonds, easily available to retail investors who normally cannot afford state bonds.

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