PM/82/91

SECRET

NED

ни

HK Section 40

cc PS

PS/Mrland

PS/Lord Belstead,

PS/PUS

Mr. Wright,

PA.

H2018

нак 166

166/1

FED

Mr. Donald,

34

набо

TRED

PRIME MINISTER

1.

Guangdong Nuclear Power Station

See (41) ↑ Af29/2

In my minute of 28 July I informed you that having

considered the case for British involvement in this proposed

project, I concluded that the economic and political advantages

of co-operation with the PRC out-weighed the possible consequences

for our non-proliferation policies.

See49

2. However, you should be aware that there are now signs that

our view may not be shared by the US Government, with possible

consequences for the proposed UK/US bid for the Guangdong project.

This bid emerged from recent discussions with the Chinese as

more promising and as offering potentially greater rewards for

British industry than the alternative UK/French proposal, but

it has still not yet received the necessary clearance from the

US Government. Earlier this year, on advice from US Government

officials and Westinghouse that such clearance was required, our

Embassy in Washington wrote to the State Department seeking an

assurance that the US Government would not seek to prevent

Westinghouse licensing the NNC to supply nuclear reactor equipment

of Westinghouse design for Guangdong. No definitive reply has

been received to this request despite unremitting pressure from

officials of the Department of Industry, Department of Energy

and my own: Department.

3. One reason which the Americans have recently put forward

for the delay is the belief, which in our view is not well-founded,

that the Chinese are aiding Pakistan's clandestine nuclear

weapons programme. This problem is to be reviewed urgently by

SECRET

/ US and

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