Her trouble-shooter image was further fostered by her sharp criticism of the authority's slow progress in improving its information technology system, even after the funds to do this had been approved by the Government. The authority eventually set up a special taskforce, headed by former Hongkong Bank chairman John Strickland, to investigate the issue last year.

But now Ms Lam, who next month will take over as Director of Social Welfare, appears keen to play down her past differences with Dr Yeoh - scarcely surprising as Dr Yeoh, who is now the Secretary for Health and Welfare, will be her immediate boss.

Asked about speculation that their past differences might make it difficult for her to forge a partnership with Dr Yeoh, Ms Lam insisted she was confident they could co-operate well. 'I think that has been exaggerated. In different positions, we have different roles and responsibilities. Eventually the ultimate goal is still to serve the community. E K [Yeoh] and I share the same mission and vision in improving welfare services,' she said, in an interview with the South China Morning Post.

Ms Lam will replace Andrew Leung Kin-pong, who is to head the SAR Office in London.

Her Finance Branch background has already provoked fears among some in the welfare sector that Ms Lam's new mission is to cut welfare funding, an impression she tries hard to dispel.

'I don't have any mandate to go down and cut expenditure. I will only try to make sure resources are utilised effectively. I hope to assure the sector that I am not there to cut funds.' But Ms Lam admitted that the recent controversy over the Government's decision to switch from a reimbursement system to a lump-sum arrangement for funding welfare organisations was an issue that remained unresolved.

Social workers and welfare agencies recently took to the streets to protest against the new funding arrangements, which they fear will lead to job losses and a decline in the quality of services.

The Government responded by agreeing to allow greater flexibility in the implementation of the new scheme, but concerns remain.

As she prepares to leave her present post, Ms Lam also reflected on her unusually long spell at the Finance Branch, where she has served since joining as a principal assistant secretary in 1994. Those six years and eight months have seen her serve as the right-hand aide to three secretaries for the treasury. These included Donald Tsang Yam-kuen, who held this post prior to becoming Financial Secretary in 1995, as well as Kwong Ki-chi and present secretary Denise Yue Chung-yee.

In all that time, her most memorable moment was helping to compile the economic rescue package that the Government hastily unveiled at the height of the Asian financial crisis in June 1998. Among other measures, this included a freeze on land sales and property rate rebates to give a boost to the ailing economy.

'I can still remember the exact date,' she said, despite the fact it is now more than two years later. 'The whole package was compiled within a very short period of time before we announced it on June 23.

'We had to arrange a series of meetings in a short period, in no more than three weeks, to work out the package. I discussed with Ronald Leung Ding-bong and Lau Wong-fat [chairmen of the now-disbanded provisional urban council and regional council respectively] whether they were willing to give up some of the property rates income that they shared with the Government, which they were.' 'I was impressed by the intensity of work within the short period. We also had to ensure it was leak-proof.' Another source of satisfaction, she said, came from the creation of an environment that now encourages government departments to increase productivity on their own without having to be forced to do so.

Ms Lam cited as an example the removal of a previous arrangement under which departments that managed to cut their spending were effectively punished for their success by being given a lower budget for the subsequent year.

That arrangement led to some departments trying to spend all their budget to ensure they received the same amount in the next financial year. As a result, Ms Lam said, some departments spent more than needed on entertainment, such as media lunches and dinners.

City University academic Professor Joseph Cheng Yu-shek recently criticised this practice, describing it as a 'spending frenzy' in a column for the South China Morning Post. 'I wrote to the academic and told him he was outdated,' Ms Lam said. 'It was true in the past but it is no longer the case now. Things are not happening in the way he thinks.' Since 1998, departments have been allowed to keep any unused money in a government central account and can draw on it to cover any expenses they incur in trying to improve productivity. As a result, $2.2 billion has been saved over the past two financial years.

But Ms Lam was adamant her job was not to save taxpayers' money at the expense of others who might be affected as a result. A win-win situation, she said, was possible in such cases as the new home finance scheme for staff at University Grants Committee-funded institutions.

Under the new scheme, housing allowances will be given to staff for a maximum of 10 years to help them to buy their own flats. It replaced a previous scheme which helped them rent flats or provided them with quarters.

'The Government, taxpayers, staff and universities are all winners,' she said.