D.C. Mayor Marion Barry has signed a newly renegotiated $20.7 million contract with city police officers, setting up a possible confrontation with the City Council and adding more fuel to a bitter labor dispute between two rival police unions.

The renegotiated contract, which D.C. City Council chairman Arrington Dixon has labeled "an expensive political stunt" by Barry, who is up for reelection next year, will go before the council for a hearing early next week. Just what kind of reception it will receive is in doubt, because Dixon already has said the council may reject the new pay provisions.

At the same time, Barry's approval of the revised contract was attacked as illegal yesterday by a spokesman for the Fraternal Order of Police (FOP). The FOP is attempting to unseat the International Brotherhood of Police Officers (IBPO), which negotiated the revised contract, as the bargaining agent for the city's police officers.

Gary Hankins, an FOP spokesman, charged that the action was "the latest illegal step in a series of illegal maneuvers." He called the new contract a political payoff to the IBPO for its early and strong support of Barry's mayoral candidacy three years ago. Hankins said the FOP believes that reopening contract negotiations during a rival union campaign constituted an unfair labor practice.

It was unclear yesterday what the renegotiated contract will cost the financially strapped city. According to Barry, it will cost $160,000 more in salaries than a contract Barry signed with IBPO last July. "In addition," the mayor said in a statement, "there will be some increases in pension costs and other benefits such as overtime."

Donald Weinberg, the D.C. chief of labor relations, said yesterday those added costs could total "several million dollars" over the three-year life of the contract because overtime pay and pension payments to 2,300 police retirees now will be based on higher base pay figures than previously negotiated. He said exact amounts have not yet been figured.

Effective Dec. 1, the new contract scraps parts of a controversial agreement that would have given police officers yearly bonuses -- rather than outright pay increases -- of roughly $1,000 for two years, with percentage raises starting only in the third year.

The new contract calls for raises of 6 percent and 7 percent in the first two years, followed by a 7-to-9 percent increase, depending on the consumer price index, for a total increase over the life of the contract of from 20-to-22 percent.

Police opposition to the original bonus-only pay increase was so strong that hundreds of policemen quit the IBPO shortly after the contract was signed in July, IBPO officials acknowledged. In all, about 200 police quit the union and most joined the rival Fraternal Order of Police, which now claims to outnumber IBPO. On Dec. 15, the city's 3,300 policemen up to the rank of sergeant will vote on which union shall be their bargaining agent.

The FOP spokesman said the union recently polled council members and found that they generally support the new pay raise, but "they have problems with the methods the mayor used" in agreeing to renegotiate a signed contract. Dixon, a possible contender for Barry's job next year, had said the city made a mockery of collective bargaining by reopening the negotiations.

Neither Barry, who is in Detroit at a conference, nor Dixon could be reached for comment yesterday. Larry Simons, president of IBPO local 442 also was not available.

Weinberg said yesterday that the reopening of contract talks legally was justified and also was prudent bargaining by the city.

After signing the July pact, Weinberg said, city officials learned that it technically violated a federal law governing the federal health insurance program in which the city participates. The law limits to 75 percent the city contribution for health benefits, but the contract called for 80 percent, he said. IBPO cited this apparent illegality in requesting new talks, he said.

Once talks reopened, Weinberg said, the city agreed to change the contract to percentage pay raises partly because the mayor already had announced pay increases of 5 percent for nonunion personnel, plus 2 percent bonuses. If the city had not given similar terms to IBPO, he said, the union likely would have won the money through arbitration.