SECRET
COMING NEGOTIATIONS: IT WILL NOT BE FORECLOSED BY THE PLANNED
DEPARTURE OF 2 OF THE CRAFT ON 15 SEPTEMBER. WHETHER SUCH AN
OPTION WOULD BE FINANCIALLY ATTRACTIVE WOULD DEPEND ON WHETHER
PROVISION HAD TO BE MADE IN THE AGREEMENT FOR THE COST OF REPLACE-
MENT CRAFT,
(C) YOUR PARA 5. YOUR SUGGESTION WAS MOST WELCOME. WE HAVE
AUTHORISED BANK TO INFORM THE UNIT OF THE POSITION ON AN 1
CONFIDENCE' BASIS, CONSULTING YOUR OFFICIALS ON PRESENTATIONAL
ASPECTS. VE NOW UNDERSTAND. THAT YOUR OFFICIALS HAVE ADVISED
AGAINST ANY PUBLIC ANNOUNCEMENT ON THIS POINT IN ADVANCE OF A
GENERAL ANNOUNCEMENT ON FORCE LEVELS AND COST SHARING,
(D) YOUR PARA 6. THEPE IS NO GENERAL EMBARGO, EITHER BY THE
TREASURY OR BY PSA AND OURSELVES, ON WORKS PROJECTS, BUT UNTIL
THERE IS FINAL AGREEMENT ON FORCE LEVELS AND COST SHARING THERE
MUST BE UNCERTAINITY ABOUT THE FUTURE LEVEL OF FINANCIAL PRO-
VISION AND IN THESE CIRCUMSTANCES OUR QUARTERING STAFFS AND PSA
ARE SUBMITTING ONLY THOSE PROPOSALS WHICH ARE CLEARLY ESSENTIAL IN ANY SITUATION, THIS SERVES EVERYONE'S INTERESTS, THERE HAS
ALREADY BEEN DISCUSSION ON THIS POINT WITH BEHK, AND ANY PARTIC- ULAR AREA OF DIFFICULTY SHOULD BE CAPABLE OF RESOLUTION IN
THOSE CHANNELS.
ENDS.
CALLAGHAN
FILES
HKICD (3)
DEFENCE D
SWFD
FS
FS/LORD GORONWY-ROBERTS
SIR D WATSON
MR LARMOUR
COPIES TO
MR ANDREW AUS(GS) MOD MR HANSFROD TREASURY MR BRYARS. CABINET OFFICE MR AGGLETON PSA DOE
MR SYKES
MR THOMSON
MR MALE
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