BAGBERRVRILE SIR DOUGLAS CLAGUE AND KINDERSLEY BOTH RECOMMEND THAT HONG KONG GOVERNMENT SHOULD BE REMINDED THAT NON-REQUIREMENT OF A GOVERNMENT GUARANTEE HAS ALWAYS
BEEN REGARDED AS A SINE QUA NON AND THAT FAILURE TO MEET IT
WOULD MEAN ELIMINATION FROM NEGOTIATIONS. ACCEPTANCE
OF A PRE-EMPTIVE, WITH GOVERNMENT GUARANTEE STILL UNRESOLVED, WOULD CONSTITUTE A CHANGE IN THE BASIS FOR NEGOTIATIONS SO THAT, AT LEAST, THE RULES LAID DOWN IN CHAN'S LETTER OF 29 SEPTEMBER TO CLAGUE (SCOTT HAS A COPY) SHOULD BE REVISED. I SUGGEST THAT THIS **WARNING** MIGHT BE BASED ON AN ENQUIRY OF HONG KONG GOVERNMENT WHETHER THE JAPANESE ARE STILL SEEKING A LETTER OF GUARANTEE AS SUGGESTED IN PARAGRAPH 1 OF KOBAYASHI'S TELEX OF 4 OCTOBER TO FELL.
KINDERSLEY WOULD NOT REPEAT NOT WISH IT TO BE TRACED BACK
TO HIS CONVERSATION WITH HADDON-CAVE.
12.
KINDERSLEY IS SUGGESTING TO SCOTT THAT HE TELEPHONES
YOU TODAY.
SENT AT 08367/15 OCT KK
RECD AT 0836Z/15 OCT
NCG
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