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7. IN ANSWER TO ENQUIRY, I SAID THAT I DID NOT KNOW WHAT WOULD HAPPEN IF MATTERS CAME TO A DEADLOCK. I WOULD MOST SINCERELY HOPE

THAT IT WOULD NOT RESULT EITHER IN A REDUCTION IN THE GARRISON OR IN SCME FORM OF CONSTITUTIONAL CRISIS THROUGH USE OF THE OFFICIAL MAJORITY IN THE LEGISLATIVE COUNCIL: BUT THEY MUST BE WARNED THAT IT MIGHT. # COULD NOT PREDICT MINISTERS' REACTIONS TO A LACK OF

AGREEMENT.

8.

I GOT ACQUIESENCE (OR PERHAPS LACK OF POSITIVE OBJECTION) TO A SUGGESTION THAT I SHOULD SEE WHAT HMG'S VIEW WOULD BE OF A FIGURE OF £8.5 MILLION, WITHOUT OFFERING IT, IN ORDER THAT WE COULD AT LEAST SET AN UPPER LIMIT TO THE DEBATE. I SHALL THEREFORE AT AN APPROPRIATE MOMENT, PERHAPS IN A FEW DAYS TIME, DISCLOSE THE CONTENTS OF YOUR TELEGRAM NO. 113 TO ME, BUT I EMPHASIZE THAT EVEN THEN PARAGRAPH 4 APPLIES, I.E. WE MUST STILL NOT DISCLOSE RELATIVE

TIMINGS,

9. EVENTUALLY, WE LEFT IT THAT THE UNOFFICIAL MEMBERS WOULD REDUCE THEIR VIEWS AND ARGUMENTS TO WRITING AND I WOULD TRANSMIT

THESE TO YOU. THEREAFTER THEY MAY FORM A SMALL COMMITTEE TO CONTINUE CONSIDERATION OF THE MATTER WITH ME, AND EVENTUALLY I SHALL

PROBABLY HAVE TO HAVE A JOINT MEETING WITH UNOFFICIAL MEMBERS OF BOTH COUNCILS. IMMEDIATELY, HOWEVER, I AWAIT THESE WRITTEN EXPRESSIONS OF VIEW: AND WHEN I RECEIVE THEM WE CAN CONSIDER HOW

REST TO REPLY. IN THE MEANWHILE, WE WILL INCLUDE THE OLD FIGURE IN NEXT YEARS ESTIMATES WITH AN APPROPRIATE FOOTNOTE.

12.

IT MIGHT POSSIBLY HAVE BEEN BETTER TO REPRESENT THE £3 MILLION

CONTRIBUTION TO THE CAPITAL WORKS PROGRAMME AS BEING A CONTRIBUTION IN KIND, SIMILARLY TO MAINTENANCE AND MINOR WORKS. I UNDERSTAND

IT VIRTUALLY IS SUCH SINCE THE HONG KONG.PUBLIC WORKS DEPARTMENT

WILL BE DOING MOST OF THE WORK UNDER DOE GENERAL DIRECTION,

WOULD YOU HAVE ANY OBJECTION?

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