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5. If the Chinese accepted the principle of such a legal act

the timing of its implementation could be discussed.

Whilst there

is a clear advantage in establishing the legal basis for extended

leases before they are issued, publication of the Order in Council

itself might attract undue public attention or speculation. An

alternative would be to employ the instrument retrospectively and only

if and when the legality of the Governor's action in issuing a lease

going beyond 1997 were challenged in the open court. The proposed

Order in Council could then be put to the Chinese simply as a

contingency measure.

SECRET

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