CONFIDENTIAL

Dr Walter Marshall, Deputy Chairman of the UK Atomic Energy Authority visited Hong Kong and Guangdong recently to participate in a joint meeting and will lead the UK effort.

The Guangdong provincial authorities have been pressing hard for a speedy completion of the studies and therefore an early appointment by HMG of the study group members. The Secretary of State has now written to Sir Lawrence Kadoorie to assure him that we will be providing the support he requires. This will be 50% funded by UK Government (Overseas Projects Fund) and 50% by the participant organisations. The UK support team consists of representatives from UKAEA, Nuclear Power Company, Nuclear Installations Inspectorate, CEGB and BEI.

Following the return of Dr Walter Marshall from China, it has been agreed that Dr Marshall is performing two functions:

1 acting through CLP he is providing expert and professional advice on technical matters, and must be seen by the Chinese as being impartial.

2 in the eyes of Whitehall, he and his technical team are part of a continuing UK effort to secure the maximum commercial benefit for UK industry from the project.

Dr Marshall fully accepts the two roles, and so we believe do CLP and the Hong Kong Governor.

Underlying the technical considerations could be important political and commercial policy issues and it is essential that the arrangements adopted are such as to pick these up as they may arise. Accordingly, three committees are to be established:

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a technical group to be established by Dr Marshall with the UKAEA in the lead but with representation from NPC, CEGB and II. DOI, Department of Energy and FCO will attend as observers to keep abreast of technical developments and proposals.

2 a project group, which this Department will chair, with representatives from the relevant Whitehall departments and from UKAEA - Dr Marshall himself or his deputy

NIC GEC CEGB and HII. This group will have to consider establishing a credible commercial and technical package.

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a Whitehall-only policy group consisting primarily of Department of Industry, Department of Energy, FCO and others as appropriate. This will have to consider the financial as well as commercial and political implications of any UK package. Dr Marshall thus accepts the need for close technical co-ordination and overall policy leadership by Whitehall.

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