Mr Zhang said the Secretary for the Civil Service, Anson Chan Fang On-sang, had informed officials from Xinhua's foreign affairs and research departments of possible changes to employment terms for expatriate staff only on July 27, and that was during a routine meeting.

Xinhua officials had told Mrs Chan she should consult China and other interested parties before implementing the plan, Mr Zhang said.

Yet the Hong Kong Government announced the new policy three days later, said Mr Zhang.

''This can hardly be taken as informing us,'' he said.

He added that Mrs Chan was not empowered to inform China on any issues which should be done through proper diplomatic channels such as between the Hong Kong Political Adviser and Xinhua's foreign affairs department.

Mr Zhang said China hoped that Britain would raise the subject at the next JLG meeting.

Hong Kong's spokesman for the British Foreign Office, Chris Osborne, said the subject would not be discussed by the diplomatic body.

The British side of the JLG was not involved in the issue, which dealt with the pre-1997 administration, he said.

However, the right of abode after 1997 for people who did not hold a Hong Kong passport but had been residing in the territory for more than seven years would be discussed at the JLG meeting, Mr Osborne said.

So far, the British side had received no request from China to discuss the localisation policy, Mr Osborne said.

The senior British representative in the JLG, Tony Galsworthy, said Britain was willing to discuss long-term rather than interim localisation policy with China.

Mrs Chan maintained that China's blessing was not needed as the policy was just an interim measure and contracts would not be extended beyond 1997.

She said long-term arrangements would be discussed with China, the legislature and civil servant unions.

Legislators at yesterday's public service panel meeting appealed to Governor Chris Patten to shelve the new policy.

Members unanimously called for putting off the scheme, which has been effective since it was announced on July 30, until the Government had thoroughly consulted the legislature and civil servant unions.

Mrs Chan said she would consider the request but there were considerable difficulties in doing so.

''It will create a period of uncertainty which will not be good for either local officers or the overseas agreement officers,'' she said.

She also refused to divulge details of the legal advice given to the administration, which said the Government was likely to lose if expatriate civil servants sued for denying them equal access to the public service.

The Principal Assistant Secretary of the Civil Service Branch, Sally Wong Pik-yee, said no applications for transfer under the new policy had been received.

Mrs Chan disagreed that the Government had lost credibility on the issue or that it had changed its localisation policy.

''We've been on the whole very successful in the implementation of our localisation policy so far. We remain fully committed to our localisation policy,'' she said.

The Government was looking at several departments to see if specific measures had to be taken to quicken the pace of localisation,'' she said.

United Democrat Cheung Man-kwong asked whether it was wise to introduce a policy that enraged 98 per cent of civil servants.

The Liberal Party's Selina Chow Liang Shuk-yee said the Government had lost credibility for local civil servants as it had broken its promise on localisation.

Independent councillor Anna Wu Hung-yuk welcomed the policy which, she said, would provide expatriates with equal opportunities to bid for jobs in the civil service.

But the Government could not turn a blind eye to the injustice that local civil servants had suffered in the past, she said.