CHINESE and British officials yesterday extended talks on the handover of defence land after failing to strike a deal in three days of discussions. Talks would continue today, and probably into next week, the negotiators said. The move indicated the two sides were keen to conclude the seven-year-long negotiations for an accord on the territory's defence sites to be tabled to a full meeting of the Joint Liaison Group this month. The announcement was contrary to forecasts that an agreement would be reached during the three-day session. Britain has accused the Chinese team of changing its position by demanding a slightly bigger naval basin at Stonecutters Island and retaining one of the 25 military sites it had promised to give to the Government for redevelopment. Chinese officials were angry that details of the confidential exchange had been leaked to the press. Speaking after the five-hour meeting, Chinese team leader Chen Zuo'er said it was ''not without regret'' that the two sides could not reach an agreement on time. ''But we do not feel depressed, because as members of the Chinese team, we come here with the greatest sincerity to reach an agreement,'' he said. ''In order to strike an accord, we are willing to continue with our work.'' British counterpart, Alan Paul, said: ''We have not completed our work and so we have agreed to continue our discussion tomorrow and in the course of next week. ''We wish to reach an agreement as soon as possible, but we are dealing with complicated and complex matters and we have discovered that we need more time to complete our work.'' Mr Paul refused to give details of the unresolved problems. The Director of the State Council's Hong Kong and Macau Affairs Office, Lu Ping, told the British Ambassador to Beijing, Sir Robin McLaren, on Thursday that now was not the right time to meet the Governor Chris Patten. Gulu Lalvani, chairman of an electronics company, quoted Mr Lu as saying the atmosphere was not right for a meeting. Although Mr Patten had invited Mr Lu to celebrate his 50th birthday, Mr Lu told Mr Lalvani that, in the current atmosphere, the birthday cake might give him a stomachache. As for Sino-Hong Kong economic co-operation, Mr Lu said it was difficult to solve even simple issues when the atmosphere was not good. When the atmosphere was right, even difficult issues could be solved, he said.