HONG KONG HANDOVER : Showdown looms as council refuses to go quietly

The incoming Hong Kong administration and pro-democracy protesters are heading for a confrontation on the night of the handover to Chinese rule. About 20 members of the current legislature plan to address a rally from the balcony of the Legislature Council, where they will say they support reunification but oppose disbanding the council and replacing it with a body of unelected members.

Yesterday the office of Tung Chee-hwa, the chief executive- designate, said the balcony "might not be an appropriate venue" for the councillors, who will be kicked out of office after midnight on Monday. An alternative site has been proposed but Yeung Sum, the Democratic Party's deputy leader, insisted other venues would not be acceptable. "We will go ahead as planned." The provisional legislature said "careful consideration should be given to whether propaganda activities by political parties, such as the delivery of manifestos, should take place in the Legco [Legislative Council] building."

The outgoing legislature has taken the bull by the horns and approved changes to the criminal code which add the offences of secession and subversion to laws against treason and sedition but ensured charges could only be laid against those engaged in violence.

It was seen as an attempt to pre-empt China's insistence on introduction of new, possibly wide-ranging laws to outlaw subversion and secession.

China and its supporters in the provisional legislature had said the outgoing regime had no business making laws on the matter but Margaret Ng, the lawyers' representative in the legislature, said councillors should not fear China invalidating the new law but should worry about throwing "away safeguards of liberty because we do not take things sufficiently seriously".

Governor Chris Patten, speaking after the last meeting of his Executive Council, or cabinet, said the new law "provides a very helpful benchmark" for the incoming administration. He could not see why China would want to abolish it.

After Hong Kong's protests against the 1989 Tiananmen crackdown, China insisted on introducing laws against subversion and having them incorporated in the territory's mini-constitution. It is almost certain therefore that the new law will be scrapped. It was announced yesterday that Mr Tung will be given the same remuneration package as Mr Patten, including trips home. Unlike Mr Patten, Mr Tung, "as a local person", will pay income tax.

In a guarded overture, China yesterday held out the possibility of warmer ties with Britain after 1 July.

"With the transfer of Hong Kong, the problem left by history will be solved and a good opportunity is on offer for the improvement of bilateral relations," said the Foreign Ministry spokesman, Cui Tiankai.

"We wish for both countries to adopt the principle of `looking forward', strengthen co-operation and take Sino-British relations into a new era." The notion that wrangles over Hong Kong will no longer cloud Sino-British relations looks over-optimistic. Peking considers that any foreign pressure over developments in Hong Kong after 1 July amounts to "meddling in China's internal affairs".

However, London's view of the Sino-British Joint Liaison Group, which will exist for another two-and-a-half years, is definitely as a body through which Britain will be monitoring China's adherence to the treaty under which it has resumed sovereignty over Hong Kong.