The PCC's draft 1992 annual report, to be released in May, states that it believes the current police complaints system ''is generally operating well'' although admitting ''there is room for improvement''.

It says the PCC, aware that the public might see ''justice is not done or at least not seen to be done'', should become a statutory body empowered to interview witnesses, thus bypassing CAPO, to clarify ambiguities and discrepancies.

The PCC hopes these back-up measures will not only improve its public image as it takes on a more aggressive role in overseeing CAPO's work but will also promote civil rights and police accountability.

The proposals are believed to be the direct result of the first study of parallel systems in eight other jurisdictions.

The draft report points out that seven of those jurisdictions have investigations carried out by police officers while in two places the watchdog groups could take over investigations if necessary.

Last year, 62.3 per cent of complaints or 2,584 cases investigated by CAPO were either withdrawn or found not pursuable. The rate for 1991 was 64.3 per cent; 56.6 per cent for 1990; and 44.4 per cent for 1989.

Cases are classified as withdrawn when the complainant does not wish to pursue the case; cases are classified as not pursuable when the identity of the accused officer or officers cannot be ascertained or when there is no substance to the complaint or the complainant refuses to give a statement.

Last year, only two per cent of the 4,146 complaints were substantiated - a continuing drop compared with 2.3 per cent in 1991 and 3.6 per cent in 1990.

The Legislative Council's security panel has repeatedly called for an independent body to replace CAPO.

Legislators say the present substantiation rate is too low to justify claims that the system is fair and question the effectiveness of the PCC as a monitoring body.

The PCC believes that, by making itself a statutory body, it will provide additional checks and balance, and boost its credibility, which in turn will benefit CAPO.

The draft annual report points out that the PCC is apparently the only one of its kind in the world that is not a statutory body.

However, the document stresses that although the current arrangements do not hinder its functions, future statutory backing to define its functions and powers in an ordinance ''would be conducive to public confidence in the police complaints system as a whole''.

The PCC's present status does not allow the public to challenge any recommendations made by it while a statutory status would open the door for judicial review.

The recommendations are being examined by the Secretary for Security, Mr Alistair Asprey.

Executive Councillor Ms Rosanna Wong Yick-ming has recently taken over the PCC chairmanship from Dr Daniel Tse Chi-wai. Although she is not the driving force behind the drastic proposals, Ms Wong has said she wants to strengthen the PCC's overall powers.

The recommendations are believed to be supported by a majority of PCC members.

Besides proposing the two measures to extend its overall powers to monitor CAPO, the committee is also planning to launch a survey later this year to find out why so many cases were unsubstantiated.

The unprecedented study is to be undertaken by a senior government statistician and the committee is expected to take an active role.

The draft PCC report is expected to be discussed and approved by members next week and is set to be tabled before Legco in May.