SECRET

that the reason why the Unofficial Members agreed

in the end to make a defence contribution of £8

million was because they did not wish to embarrass

Sir David Trench on the eve of his retirement.

If you see no objection we propose to pass this

explanation to the Treasury, although we cannot

say what effect it will have.

11.

If we fail to reach agreement at the official

level in our inter-departmental discussions here

the matter will have to go to Ministers. But

even supposing that 'FCO Ministers feel able to

uphold the Hong Kong case the chances are that

they may well be outnumbered when the question

is considered by Ministers collectively.

our view, therefore, it is essential that we

settle this matter at the official level if we

possibly can.

12. We shall be grateful for your views.

In

6.

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