contract talks, according to a source familiar with the Police Association's position.

But Delegated Affairs Minister the Hon. Sir John Sharpe said yesterday he was confident that significant progress had been made, and that a settlement was possible in the next two weeks.

Neither Government nor the Police Association would divulge details. But the source said the Police Association negotiating team was unhappy with statements in the Senate on Wednesday by Government's Senate Leader the Hon.

Michael Winfield that implied progress was being made.

Police Association officials are now looking at the possibility of independent arbitration, the source said, and may ask the Labour Minister to settle the case under the new Trade Disputes Act introduced in the midst of the Bermuda Forwarders dispute last week.

"Most of the salary points have been agreed to,'' the source said. "But there's any number of peripherals on which Government will not budge.'' Contract negotiations have been going on for ten months between Government and the Police Association, which represents officers up to the rank of Chief Inspector.

Sen. Winfield said yesterday that he had been told most of the 38 points had been agreed to, or were close to agreement.

Sir John said he believed a settlement may be reached "in the next week or two.'' He said he understood "that the great majority of items have been agreed to.

"...Obviously, if the two sides can't agree, it may get around to where they both agree to an arbitration.'' But if it came to that, he said, he imagined the two sides would agree between themselves to take the matter to arbitration rather than depend on compulsory arbitration under the new Trade Disputes Act.

Opposition Senate Leader Sen. Alex Scott, who raised the issue during the Senate's question period, said he hoped Government would not resist independent arbitration if the Police Association wants it.

Given the emphasis put on independent arbitration in recent days, "I think Government would be hard-pressed to say no.'' He said the Police are in a difficult situation in their contract problems: They are forbidden from speaking publicly; they cannot withdraw their labour; and are extremely limited in any industrial action.