Negotiations between the Metropolitan Transportation Authority(MTA) and transit workers failed to cut a contract deal before Friday's midnight deadline, but talks went on into the morning a s both sides tried to avert a crippling transit strike.

The strike deadline passed with no word from either side. But negotiations appeared to continue, with Roger Toussaint, president of Transport Workers Union, still at the table rather than meeting with his executive board to authorize a strike or a stop-the-clockmove.

Shortly before the deadline, negotiators appeared before reporters to trade charges and lament the lack of progress in the clearly tense talks.

A strike, which is prohibited by the state Taylor Law, would cost the city hundreds of millions of dollars a day. In addition, a complaint filed by city lawyers asked that the union be fined 1 million dollars and individual workers 25,000 dollars daily, with the fines doubling each day after that. The average transit workermakes about 50,000 dollars a year.

Anticipating a walkout, Mayor Michael Bloomberg last night issued an executive order, declaring a state of emergency and putting into place a series of traffic restrictions and other contingencies in case of a strike. The mayor told reporters he planned to spend the night at the city's Office of Emergency Management in Brooklyn. "We are hoping for the best and preparing for the worst," he said.

The main issues separating the two sides are pensions, health insurance and safety. The authority had offered pay raises of 3 percent a year in a 27-month contract, which the union rejected. In addition, the MTA asked that the retirement age for new employees be raised to 62 after 30 years of service, while the union wants it lowered to 50 after 20 years on the job. Transit workers can now retire at age 55 after 25 years of service.

The union originally demanded 8 percent annual raises but lateroffered to lower the demand if the MTA agreed to a 25 percent reduction in disciplinary actions against workers.