SECRET

-9A-

DSR 11C

cast serious doubt on the legal basis of British

administration in the Territory as a whole.

In order

to preserve confidence we would therefore need at least

a statement by Peking (public or confidential depending

on the nature of our own undertaking on sovereignty)

that the status quo (ie a separate British administration)

would continue. At a point nearer to 1997 we need to find

a legal device to accommodate some exchange of statements on

SECRET

/these

89280 Dd 532113 200M 2/79 SIS

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