BEIJING yesterday appeared to backtrack on suggestions it will station the People's Liberation Army (PLA) in Hong Kong's urban areas after 1997. China's top official on Hong Kong affairs, Lu Ping, insisted nothing had been decided and dismissed a senior PLA official's statement that troops will be stationed in downtown Hong Kong as ''hypothetical''. On a tour of the Three Gorges with nine Hong Kong affairs advisers, the Director of the State Council's Hong Kong and Macau Affairs Office (HKMAO) urged local people to ''put their hearts at ease'' on the issue. Fears had risen after Xu Huizi, PLA deputy chief-of-staff and representative on the Preliminary Working Committee (PWC) preparing for 1997, said troops would be stationed in Hong Kong's urban and rural areas. Mr Lu yesterday sought to brush that aside: ''No decision has been made. What he said is hypothetical.'' He said no decision had been made on the size or location of the future garrison, and there was no need to rush into one, since negotiations on military land were still taking place in the Sino-British Joint Liaison Group. But he denied reports of a rift between his office and the PLA. ''We hold the same view,'' Mr Lu said. Speaking in Hong Kong yesterday, PWC law and order panel co-convener Rita Fan Hsu Lai-tai insisted there was no contradiction between the two official's comments. ''General Xu's opinion is that, after 1997, the PLA can do what the British Garrison is doing in Hong Kong. But he didn't give any details.'' Mrs Fan, who stressed she was speaking in a personal capacity, was also critical of Friday's decision by the Hong Kong administration to allow expatriate civil servants to switch to local employment terms. ''Shouldn't the Government consider the effect upon local civil servants before making the decision?'' she said. ''It was a bit unfortunate that the decision was made without any advance notice.'' The former Executive and Legislative Councillor questioned the Government's reason for the change, saying she did not understand why it thought letting the issue go to court - as expatriates had threatened - would have affected civil service morale. Xinhua (the New China News Agency) deputy director Zhang Junsheng also stepped up the attack on the Government's handling of the issue, saying it had failed to consult Beijing, and it was no excuse to claim it was a purely temporary measure. But Mr Lu was more restrained, refusing to comment on the Government's decision. He said contract staff, who make up most of the expatriates that stand to benefit from the U-turn, could continue to be employed after 1997. But Mr Lu said he hoped to see the pace of localisation of the civil service speeded up, although he admitted this could not be done overnight, and noted that the top posts in the Government could not be held by foreigners after 1997.