China has been given a de facto veto on major elements of the 1997-98 Budget under a consensus reached by Joint Liaison Group experts yesterday. Chinese team leader, Chen Zuo'er, said at the end of a two-day meeting that they had agreed every major decision relating to the Budget should be endorsed by both sides through meetings beginning next month. 'We will have discussions and take decisions on major revenue and expenditure policies and other important issues,' he said. 'The procedure for actual formulation of the relevant parts will only begin after a consensus is reached.' The detailed drafting work, he added, 'is something which will have to be undertaken by Hong Kong government departments.' His British counterpart, Secretary for the Treasury Kwong Ki-chi, said China had agreed the 1997-98 Budget should follow the timetable of previous budgets. 'We are equal partners on this issue,' he said. 'I think the most important thing before us is to strengthen co-operation in order to reach consensus on the 1997-98 Budget so that we can have a smooth transition. 'It is our aim that we should reach rapid consensus as far as possible so that we can continue with the budgetary process on a step by step basis.' The Democratic Party last night blasted the agreement as an 'unwarranted and unprecedented encroachment on Hong Kong's promised economic autonomy'. 'This is the most blatant sign yet of China's intent to control Hong Kong's economy and one of the most spectacularly craven recent concession by the British Government,' said the party's economic affairs spokesman Dr Huang Chen-ya. Dr Huang questioned why the Legislative Council had not been consulted. Legco must ultimately approve the Budget. 'Does Britain really think that giving China a de facto veto over the Budget's content can be good for Hong Kong's economic situation?' he asked. A government source said last night that the 1997-98 Budget was unique, adding that China had promised full autonomy for Hong Kong on budgetary issues after the changeover. 'We do not think our autonomy has been compromised,' the source said. The official declined to say whether the Government could still stick to its timetable if China did not endorse specific policies. 'The Chinese side understands the timetable is tight . . . Over major issues, I don't see any difficulty in getting a consensus. After all, we are trying to balance the needs of the whole community,' the source added. The source said details of the participation of the chief executive-designate and his team in the budgetary process still had to be discussed. 'We are passive on the question of when the chief executive will be appointed,' the source said. 'We also cannot pre-empt how he wants to take part in the process.' Another source admitted much would depend on whether China would make a fuss on every budget issue - but added the two sides were keen to reach a compromise.