SECRET

7. I hope the study will form the basis of your briefing on Hong Kong, but you may wish to discuss this further.

8. I am copying this minute and the study to the Home

Secretary, the Chancellor of the Exchequer, the Secretary of State for Defence, the Secretary of State for Trade and

Sir R Armstrong. Because of the extreme sensitivity of the subject and of the policy options discussed in the paper, the

subject is being handled on a very restricted basis within the

FCO. In Hong Kong the existence of the study is only known to the Governor, the Chief Secretary, the Commander British Forces,

the Attorney General and the Political Adviser. I should be

grateful if my colleagues would ensure that the need-to-know

principle is exercised rigorously and that no reference be made to the study in discussion with other Departments or Hong Kong

without prior reference to the FCO.

Foreign and Commonwealth Office

3 September 1982

SECRET

لا

(FRANCIS PYM)

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