POLICE have been alerted that Laguna City residents might take drastic measures to prevent facilities for the mentally handicapped being built near their estate. About 800 angry residents yesterday protested outside the Legislative Council in an attempt to block work on the workshop. A separate demonstration in support of it was staged nearby by about 300 representatives of support groups for the mentally handicapped including social workers, former mental patients and the mentally handicapped. Legislators gave unanimous support for the work on the project which should have started last December but has been delayed because of residents' resistance. Emerging from a 11/2-hour meeting with Legco members, the Secretary for Health and Welfare, Mrs Elizabeth Wong Chien Chi-lien, said the Government was determined to go ahead with the activity centre for 50 mentally handicapped people near Laguna City. She also pledged to complete work on a hostel with about 40 places for the mentally handicapped in Tung Tau. Mrs Wong said the Government had considered the arguments put forward by residents against the projects but she believed they were prejudiced. ''In fact any arguments founded on prejudice and accompanied by threats can never be valid,'' she said. She added the Government had alerted the police in case the residents sought drastic measures to demonstrate their opposition. ''It is abundantly clear to me that the objection comes from just some local and vocal residents who have refused to give up their prejudice against the severely mentally handicapped persons.'' The Director of Social Welfare, Mr Ian Strachan, also told the public that they must expect to have mentally handicapped people, or ex-mental patients living in the community. Mr Strachan said he would liaise with the Planning, Environment and Lands branch to get private or public developers to inform prospective property buyers of the welfare facilities within their property developments. ''We have a duty to tell the public in future that private or public housing estates are going to have welfare facilities,'' he said. Welfare panel convenor Mr Hui Yin-fat called on residents to be sympathetic and not attempt to stop the projects. He urged private or public developers to co-operate with Government by telling the public if such welfare facilities would be built in the development. Spokesman of the Laguna City residents, Mr Johnny Lui Chi-wah, said he was disappointed with the Government's response. He criticised Mr Strachan for being unwilling to listen to their point of view and refusing to accept a petition letter presented to him as he went into the Legco building. Mr Strachan came out 10 minutes later to take the letter but he said in Cantonese: ''I accept your petition because I have no choice. But I must say, I do not support you.'' Mr Lui said the area already had a psychiatric clinic for the mentally ill, and the construction of another centre would increase pressure on the community. He denied that their opposition stemmed from concerns about property values in Laguna City. ''If we have such worries, we would not stage our protest so loudly and let everyone know it. We could simply conceal the matter just like the developer and the Government have done,'' he said.