CONFIDENTIAL

Against this extremely worrying background, the Governor

has now appealed to us to provide immediate assistance

as follows:

4.

(a)

100 marquee tents, capable of accommodating up to

2,000 people. These tents are not available locally

and would need to be air freighted from the UK.

We estimate that the full cost would be £250,000.

(b) Costs involved in adapting a barracks at Lei Yue

Mun which would provide accommodation for 7,000 people. The Hong Kong authorities estimate that

the cost of this might be up to £4 million.

5.

The Governor has advised that if, in the period immediately before the International Conference, he were

to seek the authority of the Finance Committee of the Legislative Council for this additional expenditure, such a request would be sharply rebuffed. It would serve only to stimulate demands that the principle of first asylum

should be abandoned. It would make it more difficult

for him to obtain the approval of the Finance Committee

for further expenditure on boat people in the future.

6. I am convinced that we must take the Governor's advice

very seriously. I am equally convinced that we must now respond swiftly and positively to his request. I regret that it would be impossible for a requirement of this magnitude to be met from my Department's existing vote. In my minute of 22 May I pointed out that the ODA's refugee funds were already overstretched and that the aid programme in the year contingency reserve was under very considerable

strain. There are no Diplomatic Wing funds to meet this requirements.

CONFIDENTIAL'

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