But the British Government is having to decide what to do with the installation before the Chinese arrive. They are also keen to resist any call by China to inspect the site before 1997.

The listening post is run by a British government body called the Composite Signals Organisation, a subsidiary of General Central Headquarters (GCHQ) at Cheltenham, in western England.

GCHQ is a clandestine listening station on a much bigger scale which co-ordinates information gathered from support posts around the world, including another listening operation in the region at Singapore.

It is also closely associated with the activities of Britain's overseas secret service, MI6, although the exact nature of the relationship has not been revealed.

A spokesman for the Joint Services Public Relations Staff said he could not answer any inquiries about the Hongkong station, which is not marked on public maps.

But inquiries by the South China Morning Post revealed that it is increasingly being run by Australians, who share the information they gather with Britain and the United States.

British Foreign Office spokesman Chris Osborne said: ''Its work is something that nobody comments on.'' The site's future was not being discussed as part of the Sino-British Joint Liaison Group's deliberations on the future of land occupied by the British military, he said.

The site is understood to be scheduled for at least partial closure in 1994 and Brunei is being suggested as a new base.

After 1997, it is expected a slimmed-down version of the monitoring equipment will be established in the British consulate in line with similar operations run by other countries.

British Conservative MP and acknowledged espionage expert Rupert Allason, who writes spy thrillers under the pen name Nigel West, said the post had been a major source of intelligence gathering for a long time. He suspected it was used to gather information during the Sino-Soviet split in the 1960s.

''There was tremendous speculation in the secret service then about whether the split was genuine or an elaborate ploy to deceive the West. MI6 found out it was genuine. They were right.'' Mr Allason said the operation would also have been useful during the Cultural Revolution.

The site was in a prime location, he said. ''These sorts of sites are in quite short supply. The fact that it is there and it employs so many people is a testimony to its usefulness. The British will not want the Chinese to get their hands on it.'' But as for learning more about its role, he said: ''Nothing useful can be said about the activities of GCHQ because the moment you discuss any amount of its capability, you compromise its functions.''