Fairfax County employes would receive a cost-of-living increase of about 4 percent next year under a contract proposal to be presented to the Board of Supervisors tomorrow, which includes extra pay for the school system's newest and veteran teachers, sources said yesterday.

Contract talks between county school negotiators and the Fairfax Education Association, the larger of the county's two teacher groups, broke down at 2 a.m. yesterday after two months of negotiations. FEA President Donna Caudill called the talks the worst she had observed in five years.

Because teachers and other public employes in Virginia legally have no collective bargaining power, the increase amounts to a final package that requires only the approval of the county School Board and the Board of Supervisors.

Caudill said the FEA's 6,300 members probably will be asked to approve a move to "work to the rule" -- refusing to perform duties outside school hours -- to protest the county's offer. The FEA approved such a slowdown last year but called it off at the last minute when the county offered extra money.

The contract proposal will be presented tomorrow by County Executive J. Hamilton Lambert and Superintendent Robert R. Spillane, who agreed on the cost-of-living figure for the county's 22,000 employes, including 7,000 teachers.

Lambert will include the salary figures in his budget proposal to the supervisors early next year. Spillane will present them as part of his January budget proposal, which must be approved by the School Board and then the supervisors.

Sources said the teacher contract will include about a 4 percent cost-of-living increase, a starting salary for new teachers that is nearly $20,000 and additional increases for the most veteran teachers to persuade them not to leave the school system. Starting teachers now receive $18,385.

In addition, about 60 percent of Fairfax County teachers generally receive grade increases based on experience.

Spillane and Lambert would not comment yesterday on the specifics of tomorrow's announcement. Spillane said the offer will be "reasonable."

"My major concern," Lambert said, "is that the school and county employes get a fair increase and that it be the same on both the county and school side. The School Board and the Board of Supervisors have been abundantly fair to the employes over the past five years."

Caudill said the school negotiators' latest offer was an "unacceptable" package of a 3.4 percent cost-of-living increase, a $395 annual increase for the most experienced teachers in each salary classification and, possibly, a higher starting salary for new teachers.

The FEA, which initially asked for 20 percent raises, came down to 8.8 percent by the time talks broke down, she said. Last year, teachers and other county employes got a 4 percent cost-of-living increase, and teachers received an additional 1.7 percent in the form of three extra paid "snow days."

Caudill said school system negotiators rejected the teachers' attempts to negotiate smaller class sizes, saying that this is a School Board prerogative. Agreement was reached on retirement benefits but not on new health care coverage.

Rick Nelson, president of the 820-member Fairfax Federation of Teachers, said the school system's "outrageous" offer to his negotiating team was similar to that made to the FEA. He said the increase averaged 3.7 percent for all teachers, but those at the top and bottom of the experience scale would get more than those in the middle.

Spillane said he planned to talk with Lambert and school system officials today before putting together the system's final contract package proposal. "There have been no formal offers at all," Spillane said. "There have been discussions."