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(73

Your reference HKK 21/4

Down Stewart,

(74)

४८

Our reference

BC 47

7th March, 1969.

Hong Kong Tunnel

You wrote to me on 27th February inviting comments on Hannam's suggestion in Christian 003 of 26th February of an inspired P.Q.

2.

Our main objective is of course to help win the Tunnel contract for the U.K. on acceptable terms. We have accordingly taken steps to ensure that all the interested parties are aware of our present conditions, and in conjunction with yourselves we are seeking to avoid any possibility of an irrevocable decision in favour of the French without our being given the opportunity to match them. At this stage, I am inclined to think that so far as our main objective is concerned, an inspired P.Q. is a shot that might best be kept in the locker possibly for later use. Latest information (see in particular Hannam's telegram Exced 49 of 6th March) suggests that things might be moving our way.

3. On the other hand, Hannam made it clear that in making his suggestion he was mainly concerned with a number of peripheral considerations, including public relations within the Colony, political confidence and possible damage to U.K. trade interests. I must leave you and Gowers (to whom I am copying this letter) to judge how important these considerations are and to decide whether they justify a P.Q. at this stage. If you decide to go ahead, we should wish to work out the drafting with you. On the other hand, if you do not feel strongly I would be inclined to shelve the suggestion for the time being.

4.

Hannam mentioned in a recent cable that Kadoorie was still emotionally against the British offer, but that his feelings were cooling down. I wonder whether a brief comforting acknowledgement of the letter of 7th February to Lord Shepherd might help? You might consider that too much time has elapsed, and if things are going in our favour it might be a case of "least said soonest mended". will wish to consider.

5. I am copying this letter to Gowers in the Board of Trade.

H. H. Stewart, Esq.,

Hong Kong Department,

London, S.W.1.

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