The D.C. City Council put the city on a collision course with the suburbs yesterday over plans for completing the Metro subway system, insisting that fares be kept stable instead of rising along with the cost-of-living index.

Although it unanimously voted support for Metro's new financial program, the council also threatened to withhold future city contributions unless the transit authority settles a long-standing $5 million contract dispute with a black contractor.

Approval of the Metro plan came at the 43rd and last meeting of the council's two-year session. All pending bills that have not been enacted are now dead and deliberations on them must begin anew in January.

With regional officials planning to meet Friday and Saturday on Metro financing, Prince George's County remains the only jurisdiction that has not supported the plan to raise an additional $1.5 billion to finish all 100 miles of Metro and to assure future operating subsidies.

The plan calls for raising fares periodically at half the rate of the rise in the federal consumer price index. Some suburbs have voted to seek even steeper increases.

The D.C. Council adopted a formal report yesterday saying the city still wants to stabilize fares because "increases work a particular hardship on (Washingtonians), a large part of whom are transit-dependent and have lower incomes" than suburbanites.

On construction financing, the council said future transfers of the District's share of federal funds from abandoned interstate freeway projects depends upon Metro settling a claim for about $5 million in cost increases filed by Swindell-Dressler/Jackson.

That joint venture of two firms, built the section of the Blue Line that includes the Smithsonian station. Paul R. Jackson of Washington, a member of the group, was the first black contractor to win a major Metro contract at a time when minority participation was being pushed.

Council member Jerry A. Moore Jr. (R-At Large), who also serves on the Metro board, said Metro has offered only a $1.25 million settlement, which he said was too low.

In other matters yesterday, the council:

Enacted a bill that virtually outlaws the private use of polygraph lie detectors in the city.

Overrode, by a vote of 11 to 0, a veto by Mayor Walter E. Washington of a bill that would require future council confirmation of nominees to the mayor's cabinet.

Extended the year-old ban on new gas-and-go service stations until next April.

Rejected a temporary ban on all new diplomatic chanceries in residentially zones neighborhoods.