THE Housing Department wants to go ahead with a $405 million plan to develop two spacious new complexes, in defiance of allegations by the Director of Audit, Brian Jenney, that the present headquarters are under-utilised by usual government standards. The proposal was approved by the finance committee of the policy-making Housing Authority last year, but has been returned for confirmation in the light of Mr Jenney's doubts about the need for extra space. Authority members have until tomorrow to request further discussions about the plan. Director of Housing Fung Tung told the authority last year that it was short of 1,347 square metres in net office space, and that projected staff increases up to 1999 would exacerbate the shortfall. He proposed developments at Wang Tau Hom and Ho Man Tin with a total floor area of 19,830 square metres, which would result in 5,991 square metres of the headquarters at Ho Man Tin being freed for other use. The new buildings would be completed by 1999 and cost $405 million at 1993 prices. But a recent review by Mr Jenney concluded that staff of the Housing Department, the third largest department in the administration managing Hong Kong's vast public housing system, already enjoyed a more comfortable work area than other departments. He noted that the present staff size had not yet reached the designed capacity of the building. There were also more spacious lifts, lift lobbies, toilets, staircases and other circulation areas. ''On average, the Housing Department standards were some 20 per cent higher,'' Mr Jenney said. Mr Fung had not told the authority that the headquarters was to accommodate 3,927 staff. Last year there were 2,770 staff members and this would rise to only 3,308 in 1999. ''As a result, no explanation was given as to why, despite the fact that there were only 2,770 staff working in the headquarters building in 1993, additional space was required,'' Mr Jenney said in the draft of a coming report. He estimated that up to 5,266 square metres of office space would have been saved if normal government standards were applied. Replying to Mr Jenney's query, Mr Fung said that the design capacity of 3,927 was only ''a preliminary design concept'' in 1985. He said experience had shown that more space was needed than had been initially anticipated.