Mr Leung said owners of industrial buildings were continuing to convert their premises into offices illegally to avoid the red tape of putting in a planning application and to save money.

Under the planning laws, owners are allowed to use 30 per cent of an industrial building for ancillary offices, but many developers are exceeding the limit to build offices for which there is greater market demand.

Revisions to the Town Planning Ordinance guidelines, introduced in October, lifted restrictions on the amount of space which could be used for offices in composite industrial-office (IO) buildings.

Under the new regulations, owners of industrial buildings can apply to the planning department to convert their properties into IOs and subsequently modify the lease for entirely office usage.

Until the changes were introduced, no more than 75 per cent of an IO building could be used as offices. Now, it is possible to use 99.9 per cent of a building for offices, provided they are ancillary to a nearby industrial building or warehouse, and fulfil other criteria, such as having access to sufficient space for parking cars.

IO buildings are located within the Government Planning Department's industrial zones, which are scattered throughout Hong Kong's districts.

A Government spokesman, explaining the introduction of the revisions, said: ''As the 75 per cent benchmark may cause confusion to developers and potential occupiers of these IO buildings, the Town Planning Board decided to delete it from the guidelines.'' However, Mr Anderson said many developers were reluctant to convert their premises from industrial to office use legally, because they would have to pay a premium on the increased value of the property to the Government.

Ironically, because the relaxed regulations allowed an owner to convert his property almost entirely to office use, it meant the premiums rose in line with the increased value, which made costs an even greater disincentive for legal conversions, he said.

Property specialists believe owners will continue to misuse their premises, while the Government fails to enforce its rules properly.

Mr Anderson said the Government's lack of enforcement had ''caused all sorts of problems'' and believed misuse would continue unless it took action against the perpetrators.

To avoid court action by the Government, Mr Anderson said owners who illegally converted buildings from industrial to office usage could sell floors to office occupants who then had to bear legal responsibility for the misuse of the building.

If an owner merely leased a building to an occupant, then he remained liable for how the property was used, Mr Anderson said.

However, there is no guarantee an IO leased legally produces a greater financial return than one rented out illegally.

The average rent for illegally converted offices is about $15 per square foot, and in Kowloon Bay can be as much as $21 per sq ft.