The Metro Board, badly split between Washington and its suburbs, yesterday proposed an average 14 percent increase in rail and bus fares that would raise about $2 million more than the transit system needs to balance its books this year.

The shaky package, which neither side said it likes, includes boosting the minimum rush-hour fare from 60 to 65 cents on buses and from 60 to 70 cents on Metrorail. Each additional mile on the subway beyond the first three would cost 13.5 cents, up from 12.5 cents now. There would also be a 10-cent charge for bus transfers which have traditionally been free.

On the subway, for example, the fare for a rush-hour trip to Metro Center would rise from $1.25 to $1.40 from the Addison Road station in Prince George's County, from 85 to 95 cents from Ballston in Arlington and from 60 to 70 cents from Dupont Circle in D.C.

All the proposed fare increases are subject to public hearings in late September before they can be officially approved. Officials said it was unlikely that the whole package would be adopted but that a substantial increase is virtually certain in early December. That would be the third increase in a year and a half.

The package proposed yesterday represents "the extreme outer limits of what we might do," said board member Cleatus E. Barnet, who publicly presented it after it was hammered out at a closed early morning meeting. "It would probably be unjust speculation to say that fare increases of this magnitude are in the offing."

If implemented Dec. 5, as tentatively planned, the full package would raise $9.4 million in Metro's current fiscal year, which ends June 30, according to Robert Pickett, head of financial analysis for the agency. The approved budget requires only a $7.3 million boost in fares, leaving room for about $2 million in trims from the package sent to public hearings.

As they debated fare increases during the last three weeks, Metro Board members were sharply divided over a proposal by suburban jurisdictions that would cut subway charges to 7.5 cents a mile for each mile over eight. Maryland and Virginia officials said such a lower rate was justified by lower costs for long hauls and was necessary to prevent fares from spiraling so high that they would keep away riders, particularly when such distant stations as Shady Grove and Huntington open in several years.

District of Columbia officials said the plan would put an unjust extra burden on short-distance riders in Washington, and threatened to veto it.

Yesterday the board postponed the issue and tried to find a basis for settling it in the future by requesting a consultant's study on whether discounts for long-distance commuters are justified by actual costs.

The report is scheduled for mid-December.

Under board rules, fare increase proposals can be cut after public hearings but not raised, and the ones offered yesterday are high enough to accommodate a sliding scale of rail mileage charges to hold down long-distance fares.

But board chairman Joseph Alexander of Fairfax County, who strongly favors the sliding scale, said he thought it doubtful that it would be implemented in the current round of fare increases. Alexander said the board has to make a final decision on the fare increases by early November for them to take effect Dec. 5 to coincide with the opening of the Red Line subway extension from Dupont Circle north along Connecticut Avenue to Yuma Street NW.

Under yesterday's proposals the fare for short subway trips would increasse by 16.6 percent compared to 8.3 percent hikes for long commutes.

There has been little controvery on the board about bus fares except for the proposal to charge 10 cents for transfers which are now free. Suburban officials and Metro general manager Richard S. Page have sought the transfer charge to raise about $2.2 million a year and also to discourage the apparently widespread practice of people passing on transfers to others that they do not use themselves.

D.C. officials have opposed it as an unwarranted fare increase for D.C. bus riders, far more of whom than suburbanites have to switch buses to reach their destinations.

"I'd really like to hear from the public about it," said D.C. transportation director Thomas M. Downs, one of the city's two representatives on the Metro Board. "I have a feeling it won't be well liked."

Under other parts of yesterday's proposals:

Non-rush-hour fares for all subway rides would rise from 60 to 70 cents, regardless of distance traveled.

The flat fare for off-peak bus rides would go from 60 to 65 cents within both Maryland and Virginia, but stay unchanged at 60 cents in the District.

Bus fares for elderly and handicapped passengers would rise from 20 to 30 cents in the District, but remain at 30 cents in the suburbs.

Rail-to-bus transfers would continue to be free in Washington, but would increase from 25 to 50 cents in the Maryland suburbs and from 35 to 50 cents in Virginia.

In peak periods, bus trips from close-in Maryland to D.C. would rise 15 cents to $1.25 one-way while longer rides from Maryland to downtown would go up 10 cents to $1.50. Peak bus fares from Virginia to the city would go up by 15 to 25 cents, with the most expensive ride -- between Reston and downtown -- rising from $2.15 to $2.40 one-way.