LOCAL politicians were divided yesterday on whether China could carry out its threat to disband the three tiers of government at the change-over. Chairman of the United Democrats of Hong Kong (UDHK) Martin Lee Chu-ming said the State Council's Hong Kong and Macau Affairs Office (HKMAO) was not empowered to interpret the Basic Law, and thus could not declare an end to the through-train arrangement. But Liberal Party legislator Henry Tang Ying-yen disagreed and said China, as the sovereign power of Hong Kong after 1997, was authorised to re-organise the territory's political structures. Their remarks came after the office issued a statement this week saying all tiers of government should be disbanded at the change-over because legislation governing the councils would contravene the Basic Law after the termination of British rule. The Secretary for Constitutional Affairs, Michael Sze Cho-cheung, criticised the statement as ''counter-productive to Hong Kong's stability''. Mr Lee said the HKMAO, which was not one of the organs authorised to interpret the Basic Law, was not in a position to issue such a statement. The former drafter of the Basic Law said interpretation of this law was vested only with the National People's Congress Standing Committee, in consultation with a committee for the Basic Law, which was to be set up after 1997. ''How can they [HKMAO] declare any bills to be passed by the Legislative Council as contravening the Basic Law if they are not empowered to interpret the mini-constitution?'' Mr Lee asked. Municipal councillors and district board members should be allowed to ride the through-train as there were no provisions in the Basic Law stipulating the composition of district boards and municipal councils. Mr Lee wondered how the relevant electoral laws would not be in line with the mini-constitution. ''The Basic Law is silent on the composition of the district boards and municipal councils. I can't see how the relevant electoral laws will contravene the Basic Law. They must be allowed to continue after 1997,'' he said. If all systems under the colonial Government had to be overturned due to the change of sovereignty, it would create panic among the public, Mr Lee warned. ''It is a dangerous idea which shows that China does not live up to its words to preserve Hong Kong's status quo,'' he said. United Democrat vice-chairman Yeung Sum said a legal vacuum could be created if China disbanded the legislature in 1997. However, Mr Tang argued that China could re-organisethe three-tier structure because neither the Basic Law nor the Sino-British Joint Declaration had provided for a through-train. A member of the Preliminary Working Committee (PWC) for the Special Administrative Region Preparatory Committee, Dr Raymond Wu Wai-yung, said it was in line with international laws that all structures be disbanded upon a change of sovereignty. ''Whenever there is a change of sovereignty, the structure in the previous government should be disbanded according to international laws. ''It is exceptional not to disband the structures,'' he said. Dr Wu said the same would apply to other systems, including the civil service structure. Stressing that disbanding the three-tier Government did not necessarily mean re-election, Dr Wu said the most important thing was for the PWC to devise a mechanism to endorse the structures to maintain continuity. Meanwhile, Mr Sze, describing the HKMAO's statement as ''regrettable'', said: ''This would certainly undermine the stability and prosperity of Hong Kong.'' Responding to the allegation that the British side had sabotaged the political talks, Mr Sze reiterated that they had tried their best during the 17 rounds of talks on the 1994/95 electoral arrangements. A member of the British negotiating team, Mr Sze said he was frustrated by the lack of agreement. The British side should not be blamed. for the collapse of negotiations, he said.