Telephone Company led to the signing yesterday of a new contract almost a week before the old one was due to expire.

The two-year agreement, which was reached between the Bermuda Public Services Association and Telco last month, gives 84 clerical workers a 3.25 percent salary increase in both years -- 1993 to 1995.

The new contract will expire in March, 1995.

"Both parties agree that negotiations were conducted in an atmosphere of mutual honesty and trust,'' the union and Telco said in a joint statement.

"Talks were amicable and cordial throughout.'' Negotiating for the BPSA were general secretary Mr. Eugene Blakeney MP, Ms Helen Minors, Mr. Edward Ball Jr., Ms Laverne Augustus, Ms Pattie Woolridge, Mr. Andre Bean, Ms Judy Martin, Ms Felicia Lee and Ms Patricia Bell.

Negotiators on the Telco team were senior manager, personnel Mr. Anthony Taylor, Mr. Gerald Mello, Mr. Winston Robinson and Ms M. Doreen Bullock.

The Telco contract marks the third major contract to be signed in the last couple of weeks without controversy.

It follows the agreement reached between Government and 900 blue collar workers last month, and the recently-ratified contract between Stevedoring Services and some 60 unionised port workers.

Workers in both areas were represented by the Bermuda Industrial Union.

Under the new contracts, Government blue collar workers will receive about a three percent wage increase this year and a 1.8 percent increase next year.

The increase for next year was considered the lowest in memory.

And the dockworkers' contract, which will give them a 3.2 percent raise in the first year and three percent in the second, was hailed as a sign of improving industrial relations.

Labour Minister the Hon. Irving Pearman this week praised both parties in the dockworkers talks, saying: "It is a reflection of them recognising some time ago that they had to develop a better working relationship.

"They've been working hard at that for 21 years, and I find they are taking pride in reaching a new agreement without my intervention.

"That's what we're trying to put across nationally.'' Meanwhile contract talks involving hundreds of hospital workers drag on.

There are 346 hospital staff who are represented by the BIU and roughly 800 within the BPSA.