If legislation is passed on schedule, Britons will lose all privileges from 1 April, meaning that they will require visas to work, study or do business in Hong Kong.
More surprisingly, long-standing residents, who have lived in the colony for more than seven years, will lose their "right to land" and will not enjoy the special deportation arrangements which prevail at present. It is highly unusual, under the system of common law, to make restrospective changes.
"I look at it as a matter of changing somebody's rights," said Margaret Ng, a legislator who believes the government is pushing the bill through with unseemly haste.
However, Hong Kong's government is under considerable pressure to remove any hint of a suggestion that Britons will enjoy any form of privilege once the colony returns to Chinese sovereignty in July.
Chinese language newspapers yesterday published editorials welcoming the move and stating that it was in line with preparations for the end of British rule.
However, some legislators believe that the measures do not go far enough. Chan Yuen-ha, a pro-Peking legislator, is introducing a private members bill to remove an alleged loophole under which the director of immigration has discretion in granting work permits.
After April, Britons will be allowed a six-month visa-free stay in Hong Kong, compared with the current 12-month period, and they will only be allowed to visit as tourists.
It is becoming increasingly difficult to get an accurate idea of how many British people remain in the colony. At the beginning of the month, the government published statistics which suggested that the number of British residents had been cut by a quarter to 25,500, in the 10 months from February to December last year.
However, anecdotal evidence and reports from employers of manual labour suggest that Britons are still flooding in to take advantage of special rules which mean they do not need to obtain work permits. On the other hand, a lot of long-standing residents, particularly civil servants, are finding their jobs being subject to localisation, forcing them to move out.
There have been no protests from the British community about the changes to the law. Christopher Hammerbeck, the executive director of the British Chamber of Commerce, said he thought the proposals were "broadly fair". He stated that the aim was "to get British citizens on the same basis as other foreign nationals".
China has promised that it will not make special arrangements for its citizens to live in Hong Kong. Indeed, fears of an influx from the mainland have prompted the Chinese authorities to make it clear that although Hong Kong is returning to the motherland, its citizens will not be free to travel to the former British colony.
Instead of getting entry permits from Hong Kong, they will need permission from the Chinese government.