NEW YORK (AP) _ Michael Dukakis' staff broke off negotiations for an interview on ABC News' ''Nightline'' after the show's host, Ted Koppel, refused to allow the Democratic presidential candidate to appear on the set with him, a newspaper reported.

The Massachusetts governor's campaign staff wanted to avoid a situation like that faced by Vice President George Bush, who participated in a one-hour interview with Koppel last month, the Daily News reported in Sunday's editions.

During that interview, Bush, the probable Republican nominee, was in Houston while Koppel anchored the show from Washington, D.C.

The interview included a few slip-ups on the vice president's part, when he called Koppel ''Dan,'' apparently referring to CBS news anchorman Dan Rather. Rather interviewed Bush live in January, and a heated confrontation ensued.

During the ''Nightline'' interview, Bush's media adviser Roger Ailes finally had to resort to hanging a sign labeled ''Ted'' on the camera, according to the Daily News.

With rare exceptions, Koppel insists that he be separated from his guests, with each side speaking directly into a camera. The set-up ensures that no guest has an unfair advantage over another, either through the use of body language or eye contact.

However, an ABC News source says Dukakis' press secretary, Leslie Dach, wants Koppel and Dukakis to appear together on the same set during the interview, the News reported.

Koppel's rule has been broken when ''Nightline'' wants the interview badly enough. One notable exception was an interview last fall with former Democratic presidential contender Gary Hart, in which Koppel and Hart sat together. The occasion marked Hart's first interview after withdrawing from the race.