BEIJING has attacked the European Parliament's decision to set up and fund a human rights centre in Hong Kong beyond 1997, saying the move amounts to interference in China's internal affairs. The $1.8-million fund, proposed by Britain's first Liberal Democrat Member of the European Parliament (MEP), Graham Watson, and passed by the Parliament's Budgets Committee last Thursday, has become a new bone of contention in the already tense Sino-British relationship. China's chief official in charge of Hong Kong affairs, Lu Ping, reacted strongly yesterday, saying: 'The move is tantamount to interference in China's internal affairs. It is impossible even if the sum is only $1.80.' The State Council's Hong Kong and Macau Affairs Office (HKMAO) also issued a strong statement, saying China was 'surprised' the European Parliament would continue funding the centre after the transfer of sovereignty. Describing the move as being 'incited' by a British MEP, it added: 'This is not only a severe challenge to the Basic Law of the Special Administrative Region, but also blatant interference in China's internal affairs. Chinese citizens, including Hong Kong compatriots, will in no way accept it.' HKMAO deputy director Chen Ziying said last night the proposed group was a political organisation, and if it accepted foreign funding after the changeover, it would be breaching the Basic Law. But government spokesman Kerry McGlynn last night said Chinese objections were groundless. 'I'm not aware of any reasons why a human rights group can't be established in Hong Kong, although it's not clear what has been proposed from Europe,' he said. Mr McGlynn also tried to ease Beijing's anxiety, saying: 'I can imagine that as long as the Joint Declaration is fully implemented - as China and Britain have pledged to do - the Joint Declaration will fully protect human rights in Hong Kong after 1997, so the human rights group shouldn't have too much to do.' Senior Executive Councillor Lady Dunn yesterday declined to comment on the issue, beyond saying it was natural for human rights in Hong Kong to be a matter of concern around the world. 'The whole world is increasingly concerned about human rights. Since Hong Kong has an important status internationally, it is quite natural that her situation regarding human rights receives much attention and concern from many countries,' she said. But several Hong Kong Affairs Advisers accompanying Chinese officials on a tour in Hainan said the European Parliament should consult China before granting the money. Liberal Party chairman Allen Lee Peng-fei said: 'As a courtesy, it [the European Parliament] should consult the Chinese Government.' He also expressed doubts about the purpose of setting up a human rights centre. 'If they assume human rights in Hong Kong would be trampled after 1997, I believe Beijing would object,' he said. Another adviser, legislator Hui Yin-fat, said: 'Any attempt to internationalise the human rights issue is bound to fail because China will not recognise it.' Human rights activist Ho Hei-wah said the centre would not interfere in China's internal affairs. 'It is just a non-governmental watchdog, it can't affect the administration. Beijing has simply over-reacted,' he said. 'Such groups are very common around the world. If China reacts like this, then freedom of speech and gathering is in danger.' Meanwhile, executive councillors yesterday expressed disappointment with the progress made during last week's three-day Joint Liaison Group meeting. Senior member Lady Dunn said any technical problems on subjects such as the pension scheme and Court of Final Appeal which could not be solved within the group should be passed to expert groups for further discussion.