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preparing for the negotiations over the post-1971 defence

contribution agreement, officials of the Hong Kong Government

should work out a figure for Hong Kong's contribution, both in

relation to the size of the garrison and to what would be

politically acceptable in Hong Kong. This would then be put

to the Foreign and Commonwealth Office and if the latter

(after consultation with the other Departments concerned)

considered the figure to be a reasonable one, the Governor

could put it to his Executive Council at the appropriate time.

If the latter agreed the figure, it could then be put forward

as an offer by the Hong Kong Government, thus avoiding any

appearance of its being a demand by Her Majesty's Government.

Mr. Healey agreed that such an approach secmed sensible and

this in fact, is the course which is being adopted.

We now

await the Governor's initial proposals, which are in turn

dependent on figures to be supplied by the M.O.D.

pursuing this.

We are

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