A group of New York small businessmen and women took to book burning today in an effort to dramatize their struggle against the telephone company.

"Desperate straits require desperate measures," the group's attorney, Monte Engler, said before his clients torched a small stack of Yellow Pages in a wire basket they had brought to a street corner near the New York Telephone Company's headquarters.

"We deplore book burning, but this is really advertising we're burning, not literature," Engler said.

The struggle is over the phone company's plan to split next year's Manhattan Yellow Pages into two parts, one for residential users and one for business users.

The New York Telephone Co. says people want the yellow pages divided because it has grown unwieldy. Engler's clients contend the phone company wants the book divided to increase its revenues.

Chicago and Philadelphia already have split books, and Pittsburgh, Detroit and Baltimore will have them by next year.

A Chesapeake and Potomac Telephone Co. spokesman said splitting the Washington book is under study and plans are going ahead to introduce the new format in Norfolk. In fact, Ma Bell plans to make the changeover in eight to 10 cities a year.

The new format will "offer the public little extra, while raising millions of dollars of additional revenue for the telephone company," Engler, the attorney for the Businessmen's Coalition Against Yellow Pages Advertising Abuse, said in a complaint to the Federal Trade Commission.

Joseph Silvestri, division staff manager for New York Telephone, said that isn't the case. "We don't anticipate there will be a significant revenue increase," he said in an interview. The Manhattan book, which has a circulation of 1.3 million, including 7,000 copies abroad, brings in roughly $28 million annually, Silvestri said.

"I don't think we should stop improvements to listen to a segment that may not grasp the benefits," Silvestri said of Engler's group, which also is protesting to the New York attorney general's office and the Public Service Commission in an effort to block the Yellow Pages change.

"Since the early 1970s we've had vibes from businessmen and consumers that the Yellow Pages needs improvement," Silvestri said.

Manhattan's 2,144-page book is too bulky. Purchasing agents have told the phone company that they waste too much time walking their fingers through it. People looking for pet stores, garden hoses and other goods waste time skipping over the listings for lathes, precision grinding and other business services.

A half-page advertisement, the largest permitted, costs $735 a month this year in Manhattan. What upsets Engler and his coalition of groups -- representing 13 businesses including telephone answering services, movers, exterminators and locksmiths -- is that each of the new books will charge $763.30 monthly.

The business Engler represents serve business and residential customers that need to advertise in both books. A discount, available if they take the same size ad in each book, will bring their total cost to $1,068.60 monthly.

Since residential phone customers will not get the business Yellow Pages (unless they request it), the coalition argues that advertisers are being asked to pay more for less. Business offices will get both books under the phone company's plans.

The coalition picked up support from New York Attorney General Robert Abrams, who asked the Public Service Commission on Tuesday to reverse itself and hold a hearing on the split book. Abrams said the economic impact of the split book on businessmen advertising in the yellow pages will be quite significant.

Silvestri and other phone company officials say they have taken surveys that show that overwhelming majorities of businesses and consumers want the new, split books. They have not, however, made their surveys public.

The phone company rejects simply splitting the book alphabetically, which would reduce bulk, because, it says, bulk is only one of the problems.

Stephen Wolf, a paint dealer who doesn't mind splitting the Yellow Pages but doesn't think it should cost him so much more to advertise, raised a question about bulk.

The telephone company began allowing half-page ads only a few years ago. Before that, the largest were one-quarter page. "Why don't they just limit everyone to smaller ads?" he asked. "The book got a lot bulkier when they increased the [ad] size."