MAJOR educational publishing houses in Hong Kong could be forced to pull out of the territory due to escalating losses arising from illegal photocopying of their books, an industry leader warned yesterday. Longman Publishing Group Managing Director Stephen Troth said copyright laws were flouted by students and some teachers in all Hong Kong tertiary institutions and, to a lesser extent, in lower-level teaching facilities. His claims followed a South China Morning Post article yesterday which revealed that the entire teaching staff of a key centre at Hong Kong Polytechnic had been involved in illegal photocopying over the past three years. Longman is the leading business English language publisher in Hong Kong, and Mr Troth said he had not been aware of the problem at the polytechnic but would be investigating and attempting to reach an amicable agreement with the institution. Many of the books that were illegally photocopied at the polytechnic were Longman texts, and Mr Troth described the issue as ''a bit disappointing''. Hong Kong has been operating under outdated copyright legislation based on British laws introduced in 1956. However, next month, the Law Reform Commission will release details of proposed ground-breaking changes to the territory's copyright laws. The new laws will take into account technology advances since 1956, which have seen the birth of photocopiers, personal computers and the like. Mr Troth said it was difficult to stop students photocopying materials on a large scale. ''I have heard of students taking orders from fellow students for copies of books. They photocopy them, which is cheap, and then make a profit on the difference,'' Mr Troth said. ''We have tried anti-photocopying measures, but that doesn't work now. The methods we were using can now be overcome by modern copiers. ''We are losing millions, but at the same time, Hong Kong is losing its publishing industry and that would be a sad thing for the territory,'' he said. ''Some courses, and ironically some of them are law courses, are written specifically for Hong Kong and could not be taken from other texts. ''If photocopying of texts continues on this scale, the local industry will cease to exist.'' A spokesman for the Anglo-Chinese Text Book Publishing Organisation agreed that illegal photocopying was damaging the industry. He said attempts were being made to improve education in terms of explaining to people that by copying other people's work, they were breaching copyright and could face tough fines or even imprisonment. A Customs and Excise Department source said operations had been run in the past against photocopy shops assisting in the production of bootleg copies of textbooks. He said that at one stage, a whole row of shops at Hunghom near the Hong Kong Polytechnic was raided and operators were found to be breaching copyright laws. In some parts of the world, licensing schemes have been introduced, whereby tertiary institutions pay fees to publishers to make copies. The Post revealed yesterday that an internal investigation at the Hong Kong Polytechnic had found that the high-profile Centre for Professional and Business English had also illegally sold course material to the Mass Transit Railway Corporation (MTRC) when the material was rightly the property of the Hongkong Bank. Both the Hongkong Bank and the MTRC have terminated the services of the centre and compensation understood to be more than $130,000 has been paid to the bank. Many of the courses were fraudulently sold to leading companies throughout Hong Kong as ''company specific'' courses designed for the special needs of each company when in fact, the courses had been copied directly from standard business textbooks.