Mr Allan Roger, chairman of the association's localisation committee, said the Government could avert payments if it was prepared to amend the localisation policy before officers went to court.

Mr Roger said the association was confident of winning the cases because human rights experts suggested the localisation policy contravened the Bill of Rights.

While they would not want to resolve the matter in court, they had to prepare for the possibility because members were increasingly being forced to leave the civil service, he said.

The association had advised members to keep records of their costs and losses as a result of losing employment, in case the court action had to be taken.

''We would regret having to do this - both the Government and our members would incur significant costs with estimates up to several million dollars,'' he said.

If the court ruled in favour of them, the Government would have to pay claims of $100 million or more for employees wrongfully dismissed since 1991, he said.

''Prudent civil service management would dictate that such a financially risky policy should be put on hold pending a review,'' he said.

As a last-ditch effort to persuade the Government to review the localisation policy, the association will meet Legislator Councillors today to solicit their support.

In a position paper submitted to legislators, the association maintained they supported the policy of giving preference to local applicants when recruiting for the civil service.

But it argued that the localisation policy discriminated against a minority group of Hongkong people on the basis of their social origin, which was unacceptable under the Bill of Rights.

The association urged the Government to temporarily suspend the policy until a review of the definition of ''local'' was completed, and to allow expatriate officers on contracts to convert to local terms of employment in the interim.