Fairfax County Executive J. Hamilton Lambert and the Board of Supervisors are discussing a contract package that would keep Lambert in his job for another year but allow him to collect thousands of dollars in compensatory time if he works more than eight hours a day, according to sources.

The arrangement could significantly boost Lambert's annual salary because, as the county's top administrator, he is on 24-hour call, routinely works 12- and 14-hour days, does not take vacations and frequently works on weekends. He currently is paid about $129,000 a year.

Sources familiar with the negotiations said that if compensatory time earned by county department heads is used as a guide, Lambert might draw an additional $10,000 a year in comp time payments.

Hypothetically, if Lambert continued the habit of working 60-hour weeks and charged every overtime hour to comp time, he could earn an additional $60,000 or more. But for Lambert to do that, officials said, would be highly irregular.

With citizen complaints about taxes and potential budget deficits of $20 million this year and $100 million next year, any decision to raise Lambert's pay or retirement package substantially could pose severe political risks for the supervisors.

"I'm not sure that the board, at taxpayer expense, needs to sweeten the pot," said Supervisor Thomas M. Davis III (R-Mason). "I don't mind him collecting comp time, but I don't want that if it's like a $25,000 bonus. If this is a disguised bonus, we're all going to have a problem with it."

Lambert, one of the area's best known and longest serving bureaucrats, caught the board off guard this week when he submitted a letter saying that he intends to retire by the end of the year.

Close associates, however, doubt that Lambert, 49, really wants to end his 31-year career with the county. Instead, they believe the letter may be an attempt to protect certain benefits or to obtain a better contract.

According to Lambert's closest confidants, perhaps the most important -- and intangible -- aspect of his retirement notice was the signal it sent to the board that Lambert wants more public support.

"J's ego needs constant stroking," said a high-ranking Fairfax County official who asked not to be identified. "Three or four months ago, he wanted some sort of public expression {from the board} that J's the greatest; he can walk on water; we don't want him to leave. That would have been enough. Today, he's put himself in a corner and the board in a very, very tough spot, because now the public statements are not going to be enough."

According to statements by board members, a solid majority wants Lambert to remain in his job through December 1991 to provide stability in the government during an election year. What is not clear is whether the board and Lambert will be able to agree on terms.

Previous reports based on information supplied by a supervisor incorrectly said Lambert could lose up to $30,000 if he did not retire by Dec. 31.