'This is such a fine house with great details. It is of high architectural value,' said Professor Bernard Lim Wan-fung, former member of the Antiquities Advisory Board, who finished his term last month after the board discussed the case.

'Personally, I think the house deserved a higher grade, although it may not reach the threshold of a declared monument,' the architect added.

A grade-three rating only requests that the owner keep some form of the building, or resort to 'alternative means' if preservation is not practical, such as making photographic records. But it does not confer any legal protection against demolition.

Hutchison Whampoa, which holds the property through a subsidiary called Juli May, declined to respond to inquiries about whether it would demolish the building, which is occupied by a family.

The Buildings Department says approval was given to the company to re-construct a two-storey house, a caretaker's office and a main switch room on the site.

The redevelopment would yield a residential floor area of 5,918 square feet, which is a similar size to the existing property. Renovation might be a better option than redevelopment if the new scheme did not generate much additional space, said Dr Lau Chi-pang, another Antiquities Advisory Board member. 'The antique house should be a very popular leasing property. It would make a decent residence for any ambassador,' Lau, a historian, said.

Named Stonyhurst, the house was built for John Joseph Francis, who came to Hong Kong as a military officer in the 1860s and later became a barrister, according to the antiquities office's information.

The Irishman is remembered in the city's history for drawing up the rules for enacting the formation of Po Leung Kuk, one of the largest charities in Hong Kong. He was also editor of the China Mail, an important newspaper founded in the early colonial period. The office said the house, designed by one of the city's oldest architecture firms, Danby & Leigh, now known as Leigh & Orange, contained ornamental features typical of Palladianism, an architecture style prevailing in Britain from the mid-17th century and later in the nation's colonies.

Stonyhurst also bears witness to a time when coolie labour was much needed in the construction industry, the office added. Every brick, stone and piece of timber was carried on their shoulders up to The Peak.

The Development Bureau said it had approached the owner of 23 Coombe Road, who had been briefed on the proposed grading and measures for encouraging preservation of historic sites, including subsidies for maintenance, and possible economic incentives for preservation. The antiquities office would confirm the grading after the public consultation.

Under the heritage policy, the government only has powers to freeze redevelopment of declared monuments but not of graded historic sites. But it can declare a grade-one site as a provisional monument to buy time to negotiate with the owner for preservation.