designation of 'British national' would be taken as a

sign that we were not acting in the spirit of that

commitment, particularly since the reasons for refusing

the proposal last autumn were presented to the Executive

Council as legal ones. The Prime Minister would come

under heavy attack. We at the FCO therefore, consider that

HMG should accept the Hong Kong view.

4.

We shall need to agree a line with you on this soon

as Sir Edward Youde, accompanied by five council members

from Hong Kong, will be calling on the Prime Minister

in London on Wednesday 8 September. They can be

expected to raise the nationality question vigorously.

A further consideration in view of the Prime Minister's

visit to Peking is that the Chinese government may draw

far-reaching conclusions from our public policy on

nationality as it affects Hong Kong.

5.

As we shall have to brief No 10 and our own Ministers

in advance of Sir E Youde's arrival we should be grateful

to have Home Office views on these proposals as soon as

possible.

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