CONFIDENTIAL
f. That the detailed characteristics of any replacement vessels and
the question of where they should be built (which will affect cost)
would be left to later discussions.
g.
That the Hong Kong Government would continue to pay in the forseeable
future, as they will from 1 April 1978, 75% of the support costs of
the Squadron.
19.
We would be grateful if Ministers, given the political and financial
factors outlined in this paper, would agree that formal discussions should
at a convenient time be opened between the MOD and the Hong Kong Government
on the lines suggested in para 16 above. These discussions would of course
be ad referendum to Ministers who would be consulted again before final
decisions were taken on proceeding with the purchase of replacement craft
for the Hong Kong Squadron.
8 CONFIDENTIAL