TNAG-2239-FCO40-3218-Future-of-Hong-Kong-Royal-Navy-presence-1991 — Page 170

BACKGROUND

SECRET

A

Now received

(D)

M

B.C.

1. The Secretary of State last wrote to the Defence

Secretary on 14 May about this issue but has not yet received a reply. This is because the Secretary of State

for Defence has been abroad. However the points to make reflect what we understand to be in Mr King's reply.

2. Hong Kong continue to insist that there is no way that

any arrangement can involve going to Finance Committee for

extra funds. They also insist that virtually any avenue which is available would, according to their Legal Advisers, involve an approach to Finance Committee.

3. It seems to me that what is happening is that the working level in the Hong Kong Government have concluded that the vessels are in fact not necessary. They are therefore not prepared to pay extra money to the MOD. The Governor has not yet shown himself willing to direct the

working level to find a solution. He has preferred to reserve his position,

Hong Kong Department

30 May 1991

RODAGU/3

SECRET