TNAG-0635-FCO40-783-Supplies-of-electricity-for-Hong-Kong-1977 — Page 4

CONFIDENTIAL

AMENDED DIGARIBUTION

16 MAY 1977

52

PRIORITY

CYPHER CAT/A

GRS 110

FM HONG KONG 162580Z

CONFIDENTIAL

A

See

TO PRIORITY F C O TELEGRAM NO 494 OF 16 MAX

INFO PRIORITY TOKYO,

/TO TOKYO/

LAST

RE

18 PA 1977

AER

HKK 164/

YOUR TELEGRAM NO 255, PARA 3: CHINA LIGHT AND POWER CONTRACT,

WHILE I WELCOME THE PRIME MINISTER'S FORTHRIGHT INTERVENTION WE SHOULD PREPARE OURSELVES FOR QUESTIONS AND COUNTER-PLOYS, PLEASE THEREFORE:-

(A) BRIEF H.M, AMBASSADOR IN TOKYO :

B) AUTHORISE ME TO TELL SIR LAWRENCE WHAT THE PRIME MINISTER

SAID AND WHAT INSTRUCTIONS ARE SENT UNDER (A)

*

2. ONE LEGITIMATE REACTION BY MITSUBISHI WOULD BE TO PUT IN AN

UNSOLICITED OFFER SOON WHICH WAS ATTRACTIVE, BUT COULD BE DEFENDED AS BEING COMMERCIAL, AND WHICH SIR LAWRENCE KADOORIE WOULD HAVE TO PLACE BEFORE HIS BOARD. SINCE THIS COULD RE AWKWARD IN DEFAULT OF A BRITISH OFFER, I SUGGEST FORMULATION OF

THE LATTER 13 NOW RATHER MORE URGENT.

3. ANOTHER BUT ILLEGITIMATE REACTION NIGHT BE TO SAY AH ATTEMPT HAD BEEN MADE TO WARN THEM OFF - NOT JUST TO WARN THEM TO PLAY STRAIGHT. HENCE THE IMPORTANCE OF 1(B) AS SUCH AN ALLEGATION COULD UNDERCUT SIR LAWRENCE KADOORTE'S POSITION WITH HIS BOARD IF NOT QUICKLY COUNTERED.

MACLEHOSE

67

PS

COPIES TO MR ROBERTS

PS/MR JUDD PS/TUS

MR MOGHIS

(RE) BJU

DOT

MR DEARING

DOI

FILES

PED

1 & GD EID

FRES SECT TRED FRO

MR CORTAZZI MR MURRAY

MO FRETWELL

CONFIDENTIAL