URBAN Councillors and district board members fear the Legislative Council's plan to build an annexe in Chater Garden will reduce the already limited recreational space available in Central. The Legco subcommittee on facilities has decided to build the annexe to provide additional floor space of 9,000 square metres. Urban Councillors have been briefed by their Legco representative, Mrs Elsie Tu, about the plan to ''construct a low-rise structure on Chater Garden, with over half of the building below ground level''. But most of them expressed reservations about the issue and said they would only support the plan if the space in Chater Garden was not reduced. The garden is managed by the Urban Council. Urban Councillor Mr Joseph Chan Yuek-sut said it would be best if the new annexe could be built elsewhere. Central and Western District Board member Mr Lam Kin-lai expressed reservations about the proposals if much space was given to the new structure. Another district board member, Mr Yuen Bun-keung, agreed. ''I think the new building should not reduce the recreational space at present available in Chater Garden,'' he said.