SECRET

OTHER RELEVANT MATTERS

12. Our Legal Advisers have suggested that it would be prudent for the Letters Patent to be amended to give the Governor reserve powers to legislate in certain areas, for example appropriations. The reason for this suggestion is to avoid a situation where LegCo refuses to pass the Budget and this leaves the Government without funds. Hong Kong feel that so to change the Letters Patent at this time would provoke an outcry from LegCo (fettering their powers etc) and do not consider the risks in doing this to match the risk that LegCo will be so uncooperative as to make Government impossible.

TIMETABLE

13. The Governor has asked for Ministers' views on these proposals before ExCo meets on 6 March next week to take final decisions.

Governor has proposed the following timetable:

Final decision by ExCo

Package submitted to Ministers

for formal approval

Once approved, give notice to the

Chinese

6 March

Announcement in LegCo

21 March

14. This timetable is of course contingent on the package obtaining ministerial approval sufficiently early to make an announcement in LegCo on 21 March. The Governor has proposed notifying the Chinese about a week in advance as a courtesy, briefing the New China News

Agency through the Political Adviser's office. The British side of the JLG could also informally alert their opposite numbers to the fact that the briefing had taken place. Peking agree.

15.

The package looks sensible and I recommend that we inform the Governor that Ministers are happy for ExCo to proceed on this basis

SECRET

A R Paul

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