THE mystery of the missing lions came up at a recent dinner party in Pokfulam. ''I know someone high up in the Bank of China who might be able to tell us what happened to them,'' ventured Hongkong Bank chairman John Gray. ''No need,'' said Lynn Pan. ''I saw them just a couple of weeks ago. They're in the basement of the Shanghai Museum.'' Jaws couldn't have dropped lower had the petite author leapt on to the table and done the can-can. For almost 50 years, the fate of the bronze lions which guarded the Hongkong and Shanghai Bank's stately headquarters on the Bund in Shanghai had remained an enigma, and now this bombshell. ''Finding them so unexpectedly certainly took me by surprise,'' says Ms Pan. ''One popular theory was that the Japanese had melted down the lions, but there they were, perfectly intact.'' What was the award-winning author of top-sellers such as The New Chinese Revolution and Sons of the Yellow Emperor doing in the bowels of the Shanghai Museum? Curiosity will be satisfied on July 5 when Lynn Pan's new book, Shanghai: A Century Of Change In Photographs, 1843-1949, is launched in Hongkong. For once, she has contented herself with an introduction and captions, but the words pack a punch and rarely have black-and-white pictures conveyed so much, even though many are faded and their subjects long dead or vanished. The happy snap chosen for the cover of this 150-page nostalgic trip perfectly captures Pan's intent. Today, that 1935 end-of-year party for the managerial staff of Texaco may seem an unexceptional affair, but not when you consider it in the context of Communist China, says the author. ''In all the history books, the old Shanghai is depicted as drowning in drugs and vice, with the Chinese suffering terrible discrimination at the hands of the foreigners, yet here's this picture showing the opposite - perfectly respectable members of both races socialising comfortably.'' Lynn Pan, born in the famous port city and raised in upper-class comfort till war and revolution destroyed her childhood idyll, clearly has no time for the Shanghai-as-Sodom school of thought. Her new book would appear to indicate a softening of that stance. ''It came about thanks to the mainland publisher who did my book In Search Of Old Shanghai. He's retired now, but got the idea for A Century of Change after seeing an exhibition. ''He asked me if I'd be interested in writing the text and when I said yes, he put the idea to a Hongkong-based mainland publisher who agreed to take it on. I couldn't have done the book without him. To gain access to the photos, I needed to go through official channels.'' As a Cambridge graduate and fastidious scholar, Lynn Pan soon discovered access only went so far, but the frustrations were endless. ''A historian was supposed to be helping with the research, but unbeknownst to me, he'd fallen out with the Shanghai Museum and hadn't been there for years, so the person who was in charge of the pictures ended up being my second collaborator. ''I was dying to rummage through the collection, but he wouldn't let me. '' Over a two-year period, Ms Pan built up her stock. What she envisaged was images which captured the rich complexity of Shanghai - the glamour and the seediness; not just the Chinese, but the Britons, French, Germans, Japanese, Russians and Jews who shaped and flavoured a city that once dazzling Paris of the East. Thanks to additional material including Sam Tata's extraordinary shots of the fall of Shanghai, she assembled a satisfying portrait, though her text ran into trouble. An official letter carried the objections. Beijing was not pleased to learn that Ms Pan considered the Treaty Port experience a good thing for Shanghai, when everyone knew it was a source of utter humiliation. Also, it was not fitting that Ms Pan should draw so many parallels - indeed any parallels - between Shanghai and Hongkong. Compromise saved the day. As author, she had the final word, assured the publisher. In that case, she didn't mind recasting her argument a little, she said. ''I made some face-saving concessions - a few words here and there - but basically got away with everything, though I have no idea what the Chinese version will say. That's been done by my Shanghai collaborator.'' Among other things, Ms Pan's research confirmed for her that the arrival of communism in Shanghai didn't exactly inflame the masses. ''Contrary to myth, the communists' following among the proletariat was pitifully small. It was the intelligentsia which got conned through appeals to patriotism and nationalism, and that's what is happening in Hongkong too.'' An even more satisfying discovery came in her favourite haunt, the basement of the Shanghai Museum. There, propped up near the lions was a signboard reading ''No dogs or Chinese allowed.'' Was this the infamous sign said to have been placed in the public gardens on the Bund by the hated imperialists? The truth was soon revealed. ''I learned that the museum's staff had been instructed to make it - and others like it - for propaganda purposes in the past and that no such sign ever existed in pre-war Shanghai. ''I've always maintained it was a total fiction, though there are people who will swear to the contrary till they're blue in the face. Well, they're wrong and I was right.''