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15.

SECRET

If Ministers are prepared to authorise the

Governor to endeavour to reach a settlement on the

basis of his proposals it is for consideration whether

the Governor should at the same time inform his

unofficial advisers that those proposals represent the

very minimum terms on which Her Majesty's Government

is prepared to negotiate a settlement and that failing

their acceptance by Hong Kong, Her Majesty's

Government will reluctantly see no alternative to their

imposition on the Colony. However, on balance it is

considered better to defer such a decision until we

have received the Governor's report on the reactions

to his proposals of his unofficial advisers on the

Executive Council.

-9- SECRET

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