There was no indication on when, or if, the talks might resume. The sides began meeting at about 10:30 a.m., but shortly after 2 p.m., two union officials said the talks had ended. They declined to characterize the negotiations, other than to say there was no progress.

MTA spokesman Tom Kelly described the stoppage as a "recess."

The two sides failed to agree on a new contract before the expiration of the union's contract early Friday, but the trains kept running as the union set a strike deadline for 12:01 a.m. Tuesday.

The new deadline gives negotiators at least a few more days to reach agreement, but MTA Chairman Peter Kalikow insisted Friday that the authority's last offer was its best.

"There is no more," he said.

The offer called for a 9 percent wage increase, phased in over three years. The union demanded annual 8 percent raises for three years. Currently, train operators, station agents and cleaners earn an annual base salary of between $47,000 and $55,000.

Transit workers are prohibited by state law from striking the buses and subways, at the risk of heavy fines and lawsuits.

Union head Roger Toussaint announced a selective strike to begin Monday against two private bus lines in Queens that are in the process of being taken over by the MTA, but are not yet covered by the law outlawing strikes by public transit employees.

The two lines have about 50,000 riders and 750 workers.

A citywide bus and subway strike would be New York's first since an 11-day walkout in 1980.

Earlier story: MTA and union not talking

By PETE DONOHUE and DAVID SALTONSTALL
DAILY NEWS STAFF WRITERS

New Yorkers dodged a crippling transit strike yesterday, but the chaos may only be delayed until next week as union and MTA officials angrily broke off talks.

After a long night of bargaining, Transport Workers Union Local 100 leaders rejected what the MTA called its "final" offer - then voted to stage a mini-strike of two private bus lines in Queens at 12:01 a.m. Monday.

A citywide strike affecting all buses and subways could begin at 12:01 a.m. Tuesday - a threat that seemed more likely given the public stances of each side.

MTA chairman Peter Kalikow insisted the package represented the agency's "final offer," at least in terms of its cash value to workers.

"We are at our limit, absent some tinkering around the edges," Kalikow told reporters. "We are ready to talk to them if they want to."

Although no formal talks had been scheduled for today, top negotiators for both sides agreed late last night to reopen discussions at the Grand Hyatt New York hotel.

Metropolitan Transportation Authority negotiator Gary Dellaverson said that if an agreement is not reached soon, the agency was prepared to request an impasse - a formal judgment that would have to be accepted by the state's Public Employment Relations Board.

If the board agreed there is an impasse, that could lead to binding arbitration overseen by an outside panel - a process that often takes months. As of late yesterday, the board said no formal request to declare an impasse had been received.

"We tried to bargain with the MTA," TWU Local 100 President Roger Toussaint said after the union agreed to extend the strike deadline. "We negotiated well past our contract deadline because we wanted to get a deal done."

The contract talks ground to a halt around 4:30 a.m. after the union rejected the MTA's latest bid, which offered annual pay raises of 3% over three years.

The 9.3% wage package clearly reflected some movement by the MTA, which had originally sought to keep raises at 5% over two years, with higher pay tied to reducing sick time or expanding duties for some workers - requirements that are now gone.

The union had been asking for 24% over three years. Currently, train operators, station agents and cleaners earn $47,000 to $55,000 a year before overtime.

Union sources said the MTA's pay package was rejected during a raucous meeting where the local's executive board voted 25 to 14 to keep the clock ticking on negotiations and push off any strike until Monday.

A minority of dissidents wanted to strike right away, while others were upset that two private bus companies in Queens - Jamaica Buses and Triboro Coach - were told to strike alone.

"There was a lot of screaming," said one union insider.

The TWU clearly chose the two bus companies for a reason, however. Because they are private companies, their employees are not subject to the same heavy fines as MTA workers under the state's Taylor Law.

The law, first enacted in 1967, makes it illegal for public employees to strike and can dock workers up to three days' pay for every day of a walkout.

The lack of a resolution left New York's 7 million daily straphangers stranded between emotional stops - glad that subways and buses were running yesterday, but increasingly bitter about having to live with more uncertainty.

"Forget about just today," said an angry Luis Mirra, 44, a youth counselor on the No. 6 train in the Bronx. "If they decide to do this next week or next month and so on, what are the people of New York supposed to do?"

Mayor Bloomberg, who spent the night sleeping on a cot in the city's emergency bunker in Brooklyn, urged the two sides to keep talking - while suggesting that the MTA had given away the store.

"I think it is more generous than the MTA can afford," Bloomberg said on his weekly radio show. Under the MTA offer, current TWU members would not have to pay anything more toward their pension costs and nothing toward their health care costs.

New hires would have to pay 3% of wages toward pension costs and 1% toward health care - far below what most public and private workers pay.

The major sticking point for the union, however, has been the MTA's insistence that the retirement age for new hires be raised from 55 to 62.

Toussaint is said to be deeply concerned that if the TWU caves on the age issue, other city and state unions may soon be forced to do the same.

Gov. Pataki urged union members to consider what he called the MTA's "very fair offer," while sternly reminding them that any strike would be illegal.

"If you strike," he warned workers, "there will be very real consequences."

With Jego R. Armstrong, Madison J. Gray and Rich Schapiro

The MTA's 'final offer'

Basics: Three-year deal with annual raises of 3%.

Benefits: Unchanged for current workers.

New hires would see the following changes:

Pension costs: New workers would pay 3% of wages (current workers pay 2%) to their pensions; retirement age would rise to 62 from 55.

Health care costs: New hires pay 1% of wages for health insurance. Current workers do not pay anything.

401(k) plan: New workers would be eligible to contribute to a 401(k) plan, with the MTA matching first 1% of pretax contributions.