Mr Rushford
RL
R.
DESK OFFICER
Legal Advisers (188)
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Mr. Mc Quads 4717
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1. As you know, we are working on a contingency paper on this subject. I am grateful for your help over it and attach a copy of the latest version for your information._
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2. The paper includes a reference to possible amendment to the 1898 Order in Council for the New Territories. It is becoming
increasingly clear that it would be difficult to get away with as
a simple decision to issue leases beyond 1997. Even if it were legally possible, I doubt if it would be sufficient to reassure opinion in Hong Kong if confidence were slipping quickly.
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3. The proposal in paragraph 10(a) of your Opinion of 7 May was for the deletion of the words 'and for the term' from the 1898 Order. This looks a very useful option and I would like to include it in our submission to the Secretary of State. However, in view of our earlier exchanges with the Attorney- General's Office on this subject I am sure that we should get their opinion on the proposal, encouraging them so far as we can not to cast doubt on it to the extent that they did over our earlier proposal in 1979 (paragraph 4 of de Winton's letter of 16 July 1979).
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4. I attach a draft letter to Mr Steel which tries to put the matter into perspective. You will see that it is our view that the Chinese would need to be consulted (pace your paragraph 11). I am sure that the trouble is that having put our original proposal to them in 1979 and having it turned down, they would be extremely suspicious of any unilateral move on our part. They already suspect that we will try to use the land lease issue in order to try to obtain an indefinite extension of our administration over the New Territories. We would therefore have to let them know, extremely tactfully, how we intended to proceed.
5. I would be glad to discuss this with you further if necessary. As you see, we need a legal view which tells us how we achieve what we want.
2 July 1981
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R D Clift
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Hong Kong and General Department
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