SECRET

members are long-standing ones and neither this

department nor any other of the departments concerned

considers that they constitute any grounds which

would justify an agreement by Her Majesty's,

Government to accept a defence contribution from

Hong Kong of less than £8.5 million.

4.

A reply to the representations has been

prepared accordingly and is in the form of the

attached two draft telegrams.

One telegram contains

1

the text of a written reply in the form of a letter

from the Governor to the unofficial members.

In

view of the possibilities of a leakage of information

from the latter the written reply has been confined

to statements the leakage of which would not cause

undue embarrassment. The other draft telegram

contains additional points and arguments which it

would be better and safer for the Governor to use in

his discretion in the course of his further

discussions with the unofficial members.

5. The drafts of both telegrams have been agreed at

the official level with the Treasury and the

Ministry of Defence (neither of those departments

considers it necessary for the matter to be the

subject of submissions to their own Ministers) and

(within the Foreign and Commonwealth Office) with

Financial Policy and Aid Department, Aviation and

Telecommunications Department, Commonwealth

Co-Ordination Department and Defence Department. RECOMMENDATION.

6.

I recommend that the Secretary of State be

asked to approve both draft telegrams for issue.

2.

SECRET

NOTHING TO BE WRITTEN IN THIS MARGIN

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