TNAG-1037-FCO40-1287-Future-of-Hong-Kong-1981 — Page 13

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5. [If Chinese only prepared to consider leases in context of

a general package including, eg a Chinese Representative in Hong Kong]

Prepared to examine any proposals. Would have to be carefully

considered by British Ministers. Any package would have to include

concrete measures to sustain confidence of Hong Kong people and

investors including legal authority to issue leases beyond 1997.

This would involve amendment of 1898 Order in Council which puts

terminal date on all Governor's powers in New Territories.

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