THE Government has dropped a proposal that would have allowed Hongkong's new ''ambassador'' to the United States, Mr Barrie Wiggham, to leave the civil service, collect a $5 million pension payment and then rejoin. But the envoy - to be known as the Commissioner for Economic and Trade Affairs - will still get a $20 million official residence. Officials bowed to pressure from legislators and said they had scrapped a proposal to make the post a departmental job. It will be created as a D8 grade administrative officer post on the directorate pay scale. The revised plan means veteran civil servant Mr Wiggham will have to remain in the Government as a policy secretary ranking official if he accepts the new package. In a revised briefing paper sent to legislators, officials said the latest plan would bring Mr Wiggham $4 million a year in pay, allowances for a personal assistant, chauffeur, domestic helpers and expenses. ''What is needed is someone at a higher rank who can take the Hongkong message around the USA and will have access at a higher level than is possible at present,'' it said. According to the Government's rules, an administrative officer post can only be held by a civil servant, while a departmental post allows the Government to recruit people from outside the civil service, including retired civil servants. The revised plan prohibits Mr Wiggham from retiring immediately and collecting his cash pension payment - estimated at $5 million - before taking the Washington job. Furthermore, Mr Wiggham, 56, faces the risk of being forced to retire next year under the revised plan. The Government's localisation policy calls for expatriate administrative officers who reach the age of 57 to retire unless no suitable local candidates can be found as replacements. The policy does not apply to departmental posts. Mr Wiggham would also be prohibited from working beyond the age of 60, because the commissioner, as a civil servant, has to retire by that age unless under exceptional circumstances. The original plan would have made it easier for Mr Wiggham to work beyond the age of 60. The Government had insisted that a departmental post would allow it to recruit candidates from the private sector. But it said in yesterday's paper that it recognised legislators' concerns that the proposal was out of step with other directorate posts in overseas offices. Traditionally, the top job in Hongkong's overseas offices is an administrative officer post. Both conservative and liberal legislators asked in a briefing earlier this week whether the plan was a ploy to benefit Mr Wiggham. ''At the meeting on April 20, it became clear that members did not consider the case for a departmental post to be fully justified,'' the paper said. ''Having regard to these factors . . . we now propose that the post be graded as Secretary, Government Secretariat.'' Legislators will meet next Tuesday to discuss the revised plan.