OUT TELEGRAM

Classification and Caveats

SECRET

ZCZC

1

ZCZC

GRS

2 GRS

CLASS

3

SECRET

CAVEATS

4

DESKBY

5 DESKBY 130005Z

FM FCO

PRE/ADD

6 FM FCO

Precedence Deskby

IMMEDIATE DESKBY 130005Z

TEL NO

7 TO IMMEDIATE HONG KONG

8. TELEGRAM NUMBER

9' PERSONAL FOR GOVERNOR

10 PROPOSED FINANCIAL MEASURES

11 1. Ministers have considered your proposals against the 12 background of the political situation, including the talks with 13 the Chinese. They recognise that constitutionally the decision 14 is for you but in the circumstances they believe it would be 15 helpful to you to be able to confirm that you had kept in close 16 touch with them. They also need to take account of the fact that 17 the matter could come up in Parliament and that they may be asked 18 there or

elsewhere what their view of the measures was. 19.2.

If at the meeting with EXCO today you face outright

20 opposition to the proposals, you would clearly wish to consider

the matter very carefully. the purssibility of.

21

///

11

every alternative, including delay, 'before going ahead this week. 22 Given the need to maintain good relations with EXCO and to help 23 the Council's standing in the Territory, Ministers would expect 24 that, you would go ahead only if you judged that otherwise the risks

del

lay or inantim

25 of Can

Yay

were

imminent collapse was unacceptable. If you did in all the

NNNN ends

telegram

File number

rafted by (Block capitult!

JE Holmes

hone number

233 4641

Authorised for despatch

Comcen reference

Catchword

BLANK

circumstances

1 Dept

Distribution

Private Office

Time of despatch

PS

HKD

Mr Burrows

Mr Donald

PS/Mr Luce

Sir I Sinclair

Mr Giffard

Mr Donald Mr Appleyard

XY A

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