A HONG KONG-owned container ship was expected to leave the territory for Vietnam last night following an engine failure which caused it to collide with a Chinese Search and Rescue vessel. An internal police report on the incident outlines how the collision almost led to a confrontation between Marine Police and the Chinese authorities in waters south of Lamma Island. The encounter took place after the Liberian-registered 'Good Most' lost power and struck the Chinese vessel which then apparently followed the ship into Hong Kong waters. As the Chinese ship 'Nan Jiu 502' tailed the 7,085-tonne container vessel it was 'very rapidly told' by Hong Kong police to honour territorial boundaries, according to sources. 'What we didn't want was this Chinese government vessel in Hong Kong,' a source said. A Marine Police launch and a Marine Department vessel were deployed to the scene, which is understood to have been videotaped by both sides. The Security Branch may also ask to be briefed on the chain of events. The 133-metre long 'Good Most' approaching Hong Kong from Pusan reported to the Marine Department's Vessel Traffic Centre shortly before noon on Monday that it had suffered a propeller breakdown and was drifting. Minutes later the ship collided with the Chinese vessel. According to the Marine Department the collision, resulting in minor damage to both ships, took place in Chinese waters southwest of Po Toi island. When the South China Morning Post visited the 'Good Most' yesterday its Second Officer Zhang Guobin said Chinese officers made no attempt to board the vessel, but the incident had frightened the 23 mainland crew. It is understood the 'Nan Jiu 502', angered by the smash, pursued the container ship. 'I think it did come into Hong Kong waters at one point but was very rapidly told 'you go over to your bit and we'll come and talk to you later',' a source said. Police speculated that the crew of the Chinese vessel, which was anchored at the time of the collision, was eager to secure written evidence laying blame for the accident with the container ship. Discussions involved a Marine Police launch travelling between the container ship and the Chinese vessel. Police Regional Command Marine Assistant Commissioner Anthony Ferrige said earlier the peaceful outcome of the case demonstrated improved links between Hong Kong and Chinese authorities. 'There was no confrontation. It was a confrontation to the point that video cameras were pointed at each other,' one officer said. 'Good Most' is owned by Hong Kong-based Ming Wah Shipping, a division of China's state-owned China Merchants Group. A company spokesman could not be reached for comment.