A conference committee met all day yesterday in an attempt to reconcile the bills, but little progress was reported.

"This is the first effect of Proposition 2 1/2," State Rep. Louis Nickinelle, chairman of the House Transportation Committee,said yesterday. "We don't want to impose this cost on the cities and towns--we have enough money lying around in the state coffers," State Sen. Joseph Walsh added.

More than 300,000 commuters use the 'T' network--which stretches from Concord, N.H., to Providence, R.I.--on weekdays. Cambridge officials began planning more than two weeks ago for a possible shutdown. Their contingency plans include:

* Strict enforcement of the city's parking laws, especially in the eastern part of the city which abuts Boston. "We have to keep East Cambridge from becoming a parking lot,"city manager James L. Sullivan said a week ago;

* Possible closing of city borders on the north and west to non-residents, if traffic problems grow unmanageable;

* Allowing city cab drivers to operate a "jitney" service, picking up more than a single passenger at a time; and

* Running limited bus service on two routes, using the services of a private bus company. Fare on the buses will be $1, and one will run in northern sections of the city, the other down Cambridge St. through East Cambridge.

The State Department of Public Utilities (DPU) also announced yesterday that it had arranged for alternative service for at least some of the 35,000 rail commuters who would be standed by the strike. The DPU said 360 buses owned by private firms would be available if needed, beginning on a limited basis today.

In Boston, city officials will enforce emergency rules mandating carpools and one-way traffic on main arteries during rush hours. Major businesses have agreed to stagger their operating hours in an attempt to ease the commuter crush.

The last subway arrived at the Harvard/Brattle station at 12:07 p.m., and a crowd of passengers raced up the stairs to catch the final buses leaving for the northern and western suburbs.

Area merchants said yesterday they feared the service shutdown would badly damage Christmas sales. All major Boston department stores confirmed last night that they would be open even if the service halt continued. "We can't afford not to be," an official of the Jordan Marsh department store said.

Service on the 'T's' subway lines began to be cut back in preparation for the shutdown as early as 7 p.m. last night.

By 8:30, motormen on Red Line trains were telling passengers over the loud speaker system that service would be virtually halted by 10:30 p.m., "thanks to your Advisory Board."

Gov. Edward J. King mobilized the state National Guard as service stopped. The guardsmen will be used to help maintain security at the system's stations and to aid travellers stranded by the cutoff