TNAG-0636-FCO40-784-Supplies-of-electricity-for-Hong-Kong-1977 — Page 158

FM HONG KONG 1505002

CONFIDENTIAL

TO PRIORITY F C O TELEGRAM NO.494 OF 16 MAY

INFO PRIORITY TOKYO.

[TO TOKYO]

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 8-

(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 BE AWKWARD IN DEFAULT OF A BRITISH OFFER, I SUGGEST FORMULATION OF THE LATTER IS NOW RATHER MORE URGENT.

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

MACLEHOSE

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