star.

***** M A 2220

I

SECRET

we cannot wait indefinitely.

Further delay could itself

put at risk the terms which we have agreed. I was disturbed to learn that, contrary to your expectations, the Executive Council had asked for changes in the Memorandum of Understanding.

}

Perhaps more important,

the release of land at Kai Tak and Victoria Barracks, to which the financial provisions of the Agreement are closely linked, will not be practicable within the timescale envisaged unless the decision to go ahead is given by 1 January 1976.

I am sure, therefore, that we must announce the Agreement before the end of the year; and Friday

19 December, will be the last occasion on which I can answer a Parliamentary Question before the Christmas Recess. In all the circumstances I propose that, provided there has by then been no statement which would place significant new restrictions on imports from Hong Kong, the Defence Costs Agreement should be announced on 19 December.

7

I understand that an announcement at 11 a m London time would be convenient for Hong Kong.. I very much hope that on reflection you will feel able to agree that we should pruceed in this way.

I am sending a copy of this letter to Goronwy Roberts.

حن نبه

Bie

William Rodgers

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