BRITAIN has submitted plans to build a military base in Malaysia to allow troops still to operate in the region following the withdrawal from Hong Kong. The base, at Mersing on the southeast tip of the Malaysian peninsula, is being linked to the controversial GBP243 million (HK$2.77 billion) aid package for the Pergau Dam power project, which a former British defence secretary has linked to a GBP1.3 billion arms deal with the Kuala Lumpur Government. There is also speculation that the base could become a new home for the General Communication Headquarters listening post at Chung Hom Kok near Stanley, which is expected to close before the 1997 handover. Chung Hom Kok is a key site for Britain's security establishment and has been used to eavesdrop on electronic communications throughout the region. The SAS, Britain's primary special forces unit, is based periodically in Hong Kong and is known to take part in jungle warfare exercises in Brunei and elsewhere in Southeast Asia. The current Commander British Forces in Hong Kong, Major-General John Foley, is intimately acquainted with both operations since before taking up his Hong Kong posting he was the director of the SAS Group and Deputy Chief of Defence Intelligence. The SAS also has an anti-terrorist role, and vetted security at Government House and Fanling Lodge before Governor Chris Patten, a potential target for the IRA, arrived in Hong Kong in 1992. The British Garrison, currently around 8,000 troops and civilians, is set to decline dramatically this year. The 600 soldiers of the Black Watch regiment leave this year, and Stanley Fort will be vacant by September. By the end of 1994 the Garrison is expected to be 3,000 strong. A spokesman for the Garrison said they had no knowledge of any plans to develop a base in Mersing. ''Our only responsibility in the region is to Hong Kong, Brunei and Nepal,'' he said. ''We do use Malaysia as a training facility for British forces but that is in Sabah, at the other end of the country. ''In any case, we would not expect to be routinely informed about government-to-government contracts.'' John Laing International, the British construction company, said yesterday it had recently submitted a report with detailed plans to the Malaysian Government, but would not comment further. ''It would be for the Malaysian Government to tell you about the report,'' said a spokesman. The Malaysian High Commission in Britain refused to comment on the deal but the Ministry of Defence in London confirmed that the original specifications were for barracks, infrastructure and electronics equipment. The specifications are also believed to include submarine docking facilities, a landing strip, and reinforced hangars for Hercules transport aircraft. Mersing has existed as a military base since the British rule in then Malaya but it will be almost entirely rebuilt under the new plans. As a signatory to the Five-Power Defence Agreement with Malaysia, Australia, New Zealand and Singapore, Britain willbe able to station troops there during joint exercises. Britain has close defence co-operation with Malaysia and officers are routinely seconded to Kuala Lumpur. Mersing was first raised during the deal to finance a GBP1.3 billion British sale of arms to Malaysia in 1988 which included the purchase of Hawk fighters and two frigates. A senior banker involved in arranging the finance of the deal was quoted yesterday as saying: ''It was on a menu of transactions drawn up by the Malaysians. They'd selected a site and they wanted our help. It would be operated by the Malaysians but wouldcontain our troops when Hong Kong goes.''