awk '
BEGIN           {c = 1
                }

!NF             {next
                }

/^DONE/         {for (i=2; i<c; i++) for (j=1; j<=MX; j++) print T[1,j], T[i,j] " > " (FILENAME ".new")
                 delete T
                 delete DL
                 n = 0
                 c = 1
                 next
                }

/^CONTINUE/     {if (n) c++; else c = 1
                 n = 0
                 next
                }

                {T[c,++n] = $0
                 MX = n
                }
' file[123]
ages-eligible-for-study: 18-months-to-36-months > file1.new
genders-eligible-for-study: both > file1.new
accepts-healthy-volunteers: yes > file1.new
non-electric-grass-pitch 10-x > file2.new
electric-grass-pitch 10-x > file2.new
towan-two-bedroom-holiday-home 6-x > file2.new
crantock-two-bedroom-apartment 4-x > file2.new
size alt > file3.new
waist-(on-half) 14" > file3.new
hip-(on-half) 24-3/4" > file3.new
inseam 34" > file3.new
size axlt > file3.new
waist-(on-half) 15" > file3.new
hip-(on-half) 26-3/4" > file3.new
inseam 34-1/2" > file3.new
size a2xlt >> file3.new
waist-(on-half) 16" > file3.new
hip-(on-half) 28-3/4" > file3.new
inseam 35" > file3.new
size a3xlt > file3.new
waist-(on-half) 17" > file3.new
hip-(on-half) 30-3/4" > file3.new
inseam 35-1/2" > file3.new