SECRET

Governor's concern is that, if he is not specific in his letter to Lu Ping at the weekend, then Lu Ping may come for further talks at Fanling without sufficient flexibility in his instructions. And the Governor may argue in his telegram that, given that what he can offer is such a low figure (10/14 billion, compared to the 30/35 billion sought by the Chinese), it would be important that Lu Ping and his superiors should be under no misapprehension on the point. otherwise, he would simply continue to probe for Hong Kong's bottom line and the haggle on numbers would be postponed to the Peking visit.

Following any discussion at No 10, I hope that we can agree upon a revised text to send the Governor before the weekend.

6.

A20AAH

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SECRET

Ardan Burns

R A Burns

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