The intervention came after a burgeoning row over China's attempts to limit the jurisdiction of Hong Kong's Court of Final Appeal. Yesterday, the British consulate in Hong Kong issued a statement saying that it would be "a matter of serious concern" if the court's powers were limited by China.
The agreement to set up the court was part of a series of deals negotiated in the run-up to the handover. Until now, Britain has maintained a resolutely upbeat stance on the progress of Chinese rule in its former colony. However, this optimistic stance is proving hard to maintain in the face of what is being described as the most serious constitutional crisis since the takeover. Martin Lee, the leader of the Democratic Party, describes it as "an atomic bomb" lurking beneath Hong Kong's relationship with its new sovereign state.
Last week, Hong Kong's Court of Final Appeal ruled on an interpretation of the Basic Law, or mini-constitution. This involved reversing a decision which barred Chinese mainland children born to a Hong Kong parent from having the right to remain in Hong Kong.
At first China said little about the ruling but in the past two days Peking has put into question the very independence of the Hong Kong legal system by insisting that the ruling be overturned and stating that the highest court in the former colony had no right even to make the ruling. "This is a very serious matter", said Zhao Qizheng, head of China's State Council information office.
China prepared the ground for its bombshell statement by releasing a number of negative commentaries by Chinese legal experts. Hong Kong officials had been hoping that these statements did not amount to a statement of policy but they were followed by a barrage in the Chinese-controlled media.
The tone and ferocity of the media attacks have not been seen since China criticised the British-controlled regime which ended in July 1997.
Local lawyers and political groups have expressed alarm over the Chinese stance. Yash Ghai, a law professor, said that China was threatening to "completely undermine" the system of autonomy which China promised for Hong Kong's legal system. Emily Lau, a leader of the pro-democracy Frontier party, said: "I think this is the most serious crisis since the change of sovereignty."
This has left Tung Chee-hwa, Hong Kong's head of government, in a very difficult position. He issued a carefully worded statement saying that his administration was giving "detailed consideration" to China's views and hoped the matter could be resolved in accordance with the "one country, two systems" principle which gives Hong Kong a high degree of autonomy.
The controversial judgment by the Court of Final Appeal could give rise to a flood of Chinese immigrants. Many of those who came illegally have started to camp outside the government offices, insisting their rights have been upheld by the courts. The police have arrested some on suspicion of over-staying their admission permits.
The situation is becoming increasingly fraught. Yesterday Peter Churchouse, the managing director of the investment house Morgan Stanley Dean Witter, said that unless the matter was resolved quickly and the matter of jurisdiction clarified, Hong Kong's role as an international financial centre could be "put in question".