SECRET
CYPHER/CAT A
GRS 120
FM HONG KONG 110915Z
DEDIP
SECRET
TO ROUTINE FCO TELNO 1127 OF 11 NOVEMBER, 1974
YOUR TELEGRAM 923 OF 25TH OCTOBER.
DEFENCE REVIEW.
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MY TEAM ARE SATISFIED WITH THE DRAFT NOTE THOUGH THEY POINT
OUT THAT IT DOES NOT INCLUDE THE CONCLUDING COMMENT BY THE HONG
KONG TEAM, THIS, AS YOU ARE AWARE, WAS TO THE EFFECT THAT IM PARA 3 OF MY TELEGRAM 1037 OF 18TH OCTOBER I HAD ALREADY RECORDED THE
VIEW THAT WHILST POUNDS STERLING 31 MILLION WAS GETTING NEARER
WHAT MIGHT BE VIABLE HERE IT WAS STILL NOT VIABLE ON A COST APPORTIONMENT OF 75/25.
DAVIES REFERRED TO THIS AT THE MEETING AND SAID THAT IT FOLLOWED FROM MY ASSESSMENT THAT IF, AS NOW APPEARED CERTAIN, THE COST WAS TO RISE ABOVE POUNDS STERLING 31 MILLION THEN THE INCREASED
COST TO HONG KONG WOULD BE WELL OUTSIDE HONG KONG'S FINANCIAL
LIMIT.
2. I KNOW THIS POINT WILL HAVE BEEN TAKEN BY YOU BUT I WOULD LIKE
IT TO BE ON RECORD.
3. MY COMMENTS ON THE SITUATION NOW REACHED FOLLOW SHORTLY.
MACLEHOSE
FILES
HD OF HKIOD
HD DEFENCE D PS PS/PUS
SIR D WATSON
MR THOMSON
KR MALE
MR WILFORD
COPIES TO:
MR HOCKADAY MOD
SECRET
MR. BRYARS AUS (GS) MOD
CDR PEROWNE D OF CP(C) MOD MR SMITH CABINET OFFICE
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