(145181) Dd. 737490 750M 1/71 Hw.

NOTHING TO BE WRITTEN IN THIS MARGIN

Registry No.

SECURITY CLASSIFICATION

XTop Secret.

Secret.

XConfidential

SECRET

DRAFT

SUBMISSION

Type 1 +

From

To:-

Sir Leslie Monson

E O Laird

Mr Logan

Telephone No. & Ext.

Mr Renwick

XBexxxxxx XUnclassifieXx

PRIVACY MARKING

In Confidence

HONG KONG

Department

Hong Kong

133

A

B

C

A

IN

DEFENCE CONTRIBUTION

1. The attached/memorandum by the Secretary of State

was considered by the Defence and Overseap Policy

Committee at its meeting on 23 July.

2.

In paragraph 8 of the memorandum the Secretary of

State had, recommended that the Governor of Hong Kong

be authorised to attempt to settle the issue of the

defence contribution on the basis of Annex I to the

memorandum (ie on terms which had been advocated by the Governor). However, the Committee decided that the

Governor should be instructed to endeavour to secure

settlement on the basis of Annex II to the memorandum.

FCO telegram No 553 instructed the Governor to proceed

accordingly.

3.

In his reply (Hong Kong telegram No 528) the

Governor expressed disappointment that his recommendation

had been rejected and asked for clarification of

certain points before he proceeded to carry out the

instructions sent to him. Before we had had time to

reply to this telegram, the Governor sent a further

telegram (Hong Kong telegram No 549) from which it

appears that he is most reluctant to act on the

Defence and Overseas Policy Committee's decision and is

still seeking to persuade Ministers to adopt his own

recommendations.

1 SECRET

/4.

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