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The minute at (c), which should be looked at in conjunction with Annex D of our sliding scale, raises a number of key political questions, as Rushford rightly acknowledges in his paragraph 8. My own view is that it would not be appropriate to deal with the question of New Territories land leases in advance of, and in isolation from the overriding question of continuing the administration in Hong Kong. Nor could we expect to get anywhere by a 'unilateral' move in which we had not first found out that the Chinese would at least acquiesce in our action. Nevertheless it is helpful to know that legally the option may be open to us.
4. As for (e), this is a useful summary of many of the main aspects of the administration and lease problems. Many of these points are already accepted but some may still, I think, be open to debate on political or other grounds. In particular, I have doubts about paragraph 3(g) of the minute. Maybe legally the PRC need not object to the grant of leases running beyond 1997. But I fear that unless the ground was prepared they might well do so for the political reason that they would suspect a device on our part to edge towards continuing British administration after that date.
5. All this adds up to a fair amount of material. I thought it right, however, to let you and the Attorney-General see how far we had got. With the run up to the Prime Minister's visit it would be helpful to have your views, and those of Peking, particularly on the 'sliding-scale' paper at (a). We are also consulting the Law Officers' Department here.
cc(with enclosures)
Jones
M W Atkinson Esq MBE, PEKING
M Elliott Esq FED/FCO
cc (without enclosures)
Dick
R D Clift
Hong Kong and General Department
II Steel Esq CMG, Law Officers' Denartment, LONDON
F Burrows Esq CMG, Legal Advisers, FCO
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