SECRET

PRIORITY

CYPHER CAT 'A'

CHKK 56775

GPS 496A

RECEIVED IN

REGISTRY No. 50

263

FM FCO 031720Z

SECRET

TO PRIORITY HONG KONG TELNO 674 OF 3 SEPTEMBER

DEFENCE COSTS: YOUR TELNO 796

:

1. MP RODGERS HAS ASKED US TO PASS YOU THE FOLLOWING PERSONAL MESSAGE:

1/

(243

BEGINS:

264

1. 1. HAVE SEEN YOUR TELEGRAM 796 AND AM MOST GRATEFUL FOR YOUR

ADVICE.

2. 1 MUST HOWEVER MAKE IT PLAIN THAT IN VIEW OF PRESSURES ON THE UK DEFENCE BUDGET, HMG ATTACHES GREAT IMPORTANCE TO A SUBSTANTIALLY INCREASED CONTRIBUTION FROM HONG KONG. I APPRECIATE THE DIFFICULTY

THIS POSES FOR YOU.

3. I PLAN, SUBJECT TO YOUR VIEWS, TO ARRIVE IN HONG KONG ON MONDAY

6 OCTOBER, BY SCHEDULED RAF FLIGHT. I WOULD LIKE TO COMMENCE -

NEGOTIATIONS THE FOLLOWING DAY WITH SOME FORM OF PLENARY SESSION AT WHICH I CAN FULLY EXPLAIN HMG'S POSITION TO THE UNOFFICIAL

MEMBERS OF THE HONG KONG GOVERNMENT BEFORE WE GET DOWN

*

TO THE DETAILED DISCUSSIONS. I SHOULD BE GRATEFUL IF YOU WOULD LET ME KNOW WHAT FORM YOU SEE THE PLENARY SESSION TAKING, SO THAT I CAN PREPARE MY APPROACH: AND CONFIRM THAT THE DETAILED DISCUSSIONS WILL, AS I ASSUME, INVOLVE OUR TWO SELVES WITH OUR ADVISERS.

I WOULD HOPE THAT WITH GOODWILL AND UNDERSTANDING ON BOTH SIDES WE COULD CONCLUDE NEGOTIATIONS IN TIME FOR ME TO LEAVE THE FOLLOWING SATURDAY, 11 OCTOBER.

4. I HOPE THE ABOVE ARRANGEMENTS WILL SUIT: AND I LOOK FORWARD

TO SEEING YOU AGAIN.

ENDS

CALLAGHAN

FILES

HKICO (3)

DEFENCE D

SWPD

PS

PS/LD GORONWY ROBERTS

SIR D WATSON

MR LARMOUR MR SYKES MR THOMSON MR MALE

COPIES TO:

MR WARD DS6 MR HANSFORD MR BRYARS MF AGGLETON

SECRET

MOD

TREASURY

CABINET OFFICE PSA DO E

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