AN ATTEMPT to expand the Hong Kong offices of Xinhua (the New China News Agency) seems to have run into difficulties. Residents of Green View Mansion at 383-385 Queen's Road East, a 27-year-old building that sits between the two blocks of Xinhua's Wan Chai headquarters, have been approached with offers for their flats, but some are reluctant to sell. It is thought China's de facto embassy is behind the move. The news agency already occupies a third of the building and any expansion will help it house its growing staff. The mystery takeover is being managed by a businessman named Koo. But a spokesman for the agent, who declined to give his name, denied this. Owners said they had been offered about $2,500 per square foot for their flats but this was not enough. Some said they would not move unless they were made an ''irresistible'' offer. It is understood the plan is to demolish the old building and build a new office, as more and more people work and live in the headquarters. The Land Registry's record shows the news agency owns eight of the 39 residential flats in the building, and the six shops on the ground and lower ground floors, through a company called Newman Investment. Most of the flats are used for staff. One resident said: ''My mother loves this flat and I don't need to sell it. I won't sell unless they offer me a very attractive price.'' Another resident, Karen Wong, said: ''Their offer is not good. My lawyer advises me to sell at $6 million.'' She has been offered $2 million for her 700 sq ft flat. The market rate is about $2,200 per sq ft. A third resident, Ms Tse, who had lived there for five years, said the owners held a meeting about a month ago. ''Some say they will sell if the price is reasonable, while some would prefer to exchange flats,'' she said. But Ms Wong said many residents would probably want to sell because the Xinhua headquarters attracted demonstrators. ''This is not a good place to live, especially after the June 4  incident as more and more people are staging protests downstairs. ''It's too politically sensitive here,'' she said. Ms Tse said: ''Sometimes it is so noisy I cannot sleep well.'' They said the takeover operation began quietly two months ago. Residents started to receive letters from Mr Koo, saying he would like to buy their flats. Ms Wong said they knew nothing about the Xinhua plan. ''I only heard about it by word of mouth. It has never been confirmed,'' she said. ''Even Mr Koo denied he represents Xinhua when I asked.'' When the Sunday Morning Post phoned Mr Koo, the man who answered said his boss wanted to buy all the flats in the building but claimed they did not represent Xinhua. ''I don't know why my boss wants to buy the building,'' he said.