Acting Financial Secretary Rafael Hui Si-yan has admitted there was hesitation within the Government before last Friday's decision to jettison free-market principles and intervene in the stock and futures markets. Monetary Authority Chief Executive Joseph Yam Chi-kwong conceded officials had 'agonised before this difficult decision was taken'. Only Financial Secretary Donald Tsang Yam-kuen remains, true to form, unequivocal in insisting what the administration did was correct. His emotive performance last Friday - with repeated attacks on the supposedly 'vicious' and 'improper' tactics adopted by currency speculators - evoked memories of Malaysian Prime Minister Dr Mahathir Mohamad's recent crusade against foreign speculators. When questioned on this similarity, Mr Tsang declined to distinguish himself from Dr Mahathir although he did highlight the differences between Malaysia and Hong Kong. Amid signs yesterday that local opinion is starting to swing decisively against the Government's intervention, with a stream of critical press commentaries, even in some papers previously supportive of Friday's action, Mr Hui sought to calm the disquiet by insisting there was no question of seeking to 'prop up the market at any particular level'. But, having intervened once, there is no turning back. Mr Tsang may partially appreciate this, conceding such interventions may have to continue for some time. But he is unlikely to appreciate the full extent of the unfortunate precedent that has been set. One obvious example is the impending Mandatory Provident Fund system, under which the Government will compel every employee to save for old age through funds which may be affected by gyrations in the Hang Seng Index. Having now decided intervention is justified in order to defeat currency speculators, it will be politically impossible to resist pressure to act likewise to protect the savings on which a comfortable old age depend, if some future fall in the stock market puts the value of these funds at risk. A single ill-judged action has undone years of patient insistence that the Government cannot act as a guarantor against failures in the free-market system. That was why the colonial administration refused to bail out the local branch of BCCI when the bank went bust in 1991 and rejected demands for a deposit protection scheme. It also explains the SAR Government's initial refusal to compensate clients of CA Pacific and the other brokerages that collapsed last spring, although a package of partial payments was later announced. At the time, these limited compensation arrangements seemed like a legitimate response to failures in the local regulatory system. Taken individually, other interventionist measures by the Government over the past few months also seemed equally justifiable at the time: notably the freeze on land sales in order to stabilise property prices. Such steps helped reassure a jittery community and attracted widespread support. The same cannot be said of last Friday's action, which is being widely judged as an intervention too far. With the benefit of hindsight it now suggests those earlier actions marked the start of a general trend towards greater intervention. Nor will this be the end of the story. There is certain to be renewed pressure for government meddling in other areas. The next step is likely to be success for the business leaders whose persistent lobbying for a more interventionist industrial policy will probably bear fruit in Tung Chee-hwa's October policy address. And if this trend towards intervention continues much further it may not be long before term laissez-faire becomes an anachronism in Hong Kong.