TNAG-0426-FCO40-472-Construction-of-an-underground-railway-system-in-Hong-Kong-1973 — Page 28

CONFIDENTIAL

374

Mr Youde

Youde

HONG KONG MASS TRANSIT SYSTEM

1.

You may like to see the two attached personal letters to Mr Royce in Mr Aston's usual discursive style. I fear that X on page 3 of the first letter may be very close to the truth.

2.

It is for the DTI to take further action if they choose. Given our policy of damage limitation and the personal nature of the letters, I do not think we should circulate them further at this moment. One point that does arise, however, is how and when we should make it clear that we will not back any guarantee to the Japanese. It is conceivable that if they knew this they would themselves withdraw their offer; and we certainly should not leave them in any doubt in the final stages of negotiation. It is also conceivable that if we made our refusal public, people in Hong Kong would conclude that unacceptable damage was being done to the Hong Kong/UK relationship. But I doubt the latter. This suggests that we should instruct Tokyo to inform the Japanese Government officially and to ask the Governor to make the point clear in the records of Executive Council, but should not make a public issue of the question unless we have to. If you agree

I will discuss this with Mr Royce after the holiday.

27 December 1973

ACSE

A C Stuart

Hong Kong & Indian Ocean

Dept.

/

that me

shall have to make

адми

this clear and should tell the Soreaner that

we shall have to make it clear: I that he should do so

2.

But

at what point

we shall

to Exco.

have to tell the Japanese will and careful deliberation. If the negotiatiome break down on price

CONFIDENTIAL