NOTHING TO BE WRITTEN IN THIS MARGIN

soon to receive his further views

ANSİONO PÁ

We

[May (]

are inclined to share his doubts about the visãom at this stage of a major act of clemency (such as the release of all prisoners) which might V only make the communists believe that pressure

for a Macao-tone situation could still be

effective.

4. If a major concession in Fong Kong is impossible and, as you have agreed,progress is also impossible on prisoner visits unless the Chinese make another move and, further, we

ithout

accept your arguments against retaliation in

London, we would appear to be

any means of moving the chiniese

We would have no alternative but to

continue to restrain publicity and do nothing

further in the hope that the Chinese will even- tually decide either to release Grey or to accept

This is a bleak

our tentative exchange offer.

prospect and it would be very difficult to explain such a policy of inactivity in the face of mounting parliamentary or public pressure, (which is likely to grow whether we encourage publicity or not). The danger of indicating in a parliamentary statement (paragraph 4 or your telegram No. 48) that action might be taken against the N.C.N.A. would be the visk of either

being forced unwillingly into such action if the Chinese failed to respond or being shown up as "paper tigers" if, having threatened, we

do nothing,

5.

The best way forward still seems to be to work for an exchange of N.C.N.A. prisoners in Hong Kong for Grey. The difficulty is tint we

have already tirown a fly over the Chinese and They

have not risen to it.

Some way of putting

/pressure

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