CODE 18-77
SECRET
3
Reference..
the
(b) such leases would not give rise to legal controversy that might
follow the introduction of indeterminate leases;
(c) the action would be much more readily understood by the Chinese: since such leases already exist in Hong Kong Island and Kowloon, and since it is common ground that the futures of the New Territories and of the other areas are inextricably tied up together, it should be relatively easy to reassure the Chinese (particularly in the light of what Deng told the Governor) that the change was of no particular significance as far as the eventual future of Hong Kong was concerned.
A
8. I realise that such leases might be open to other legal objections in Hong Kong (on the lines argued by the Hong Kong Solicitor-General last year) but those objections were pretty comprehensively demolished by our Legal Adviers here, and with prior consultation (and given that we now have a new Attorney-General in Hong Kong) this ought to be manageable. I also realise that, having gone so far down the path towards indeterminate leases, it might be difficult to set off in a new direction at this stage: but I suggest that the fact that there has been no Chinese come-back on what the Governor said in Peking means that the initiative still lies with us, and that no harm would be done by our telling the Chinese that, in the light of Deng Xiaoping's assurances to the Governor, we had dropped the somewhat complicated idea of introducing indeterminate leases and now propose simply to issue leases in the New Territories on the same basis as those issued in the rest of Hong Kong.
9. I am sending a copy of this minute to Mr Rushford, who may wish to correct me if I have misquoted him in any way, or otherwise misunderstood the legal intricacies of the problem.
N.E. havill
W E Quantrill
9 May 1979
Hong Kong and General Department
SECRET