Grease a 10 - inch tube pan with 2 tablespoons butter. Sprinkle pan with 1/2 cup sugar; set aside.
Cream remaining 1 cup butter; gradually add remaining 2 cups sugar, beating well. Add eggs, one at a time, beating well after each addition. Add vanilla; mix well.
Combine 2 3/4 cups flour, baking powder, and salt; gradually add to creamed mixture, beating until well blended. Dredge blue berries with remaining 1/2 cup flour; stir to coat well. Fold blue berries into batter. Pour batter into prepared pan.
Bake at 325° for 1 hour and 10 minutes or until cake tests done. Cool in pan 10 minutes; remove cake from pan, and let cool completely.