CONFIDENTIAL

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From the Prita 1983

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Dear John,

4 January 1983

Mr. McQuad Mr. Hale

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Hong Kong

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I enclose a copy of a letter which the Prime Minister has received from Lord Kadoorie. The latter suggests, partly with the Guangdong nuclear power station project in mind, that a compromise solution to the problem of the future of Hong Kong could be found in a formula whereby the United Kingdom abrogated the "unequal treaties" but in all other respects the status quo should remain as at present (with both parties having the right to give 20 years notice of their desire to make any changes).

The Prime Minister believes that this is not a new idea but she would be grateful for a draft reply which she could send to Lord Kadoorie. Could this please reach me by 12 January.

John Holmes, Esq.,.

Foreign and Commonwealth Office.

yous ever

Loh Coles.

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