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recently favoured, albeit narrowly, rather than the

double-seat, single-vote system they prefer. A system of

Single Transferable Vote proportional representation would have some intrinsic advantages in Hong Kong's circumstances

and be less objectionable to the Chinese, but Mr Patten

and Mr Goodlad have opted for the British system.

Presentation

6.

The Governor's package will be considered by different

audiences. He believes he can build up broad support for it

in Hong Kong (though one point which we suggested that Mr

Goodlad might explore with him is how well this would hold

under a Chinese propaganda offensive). With this and effective presentation he and Mr Goodlad also believe that the

Westminster and international reactions will be satisfactory.

7.

However the Chinese dimension remains very delicate. We

were able to discuss this with Mr Goodlad before he left for

Hong Kong. Sir Robin McLaren attended the meeting. It was

agreed that, even though the Governor does not propose to

appoint Mr Martin Lee to ExCo or unilaterally to increase the number of directly-elected members of LegCo, the Chinese reaction could be very negative and that we would need to think carefully about presentation: in particular, given our

past commitments about consultations, we must avoid the

Governor's announcements on the 1995 elections sounding like a

fait accompli. We have discussed this with Hong Kong, first

by telegram and now during Mr Goodlad's visit, and we now

agree on the line to be taken in the Governor's speech.

8.

The Governor would like the Secretary of State to give the

Chinese Foreign Minister a broad outline of his proposals in

New York on 25 September. Mr Goodlad and the Governor agreed

that, in order to ensure the right Chinese attendance, after

his return to Peking next week Sir R McLaren should let Lu

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