AGREEMENT on airport financing could be reached if Hong Kong formally agreed to cap the level of debt at $23 billion, a senior Chinese official told members of Beijing's working panel on the handover. Hong Kong and Macau Affairs Office official Zhang Liangdong said the argument over the debt cap appeared to have been settled following Chief Secretary Anson Chan Fang On-sang's statement on Thursday. Mrs Chan said the Government had ''no problem'' in capping the level of borrowing. But Mr Zhang said the British side needed to put down the agreement in black and white. ''The ball is in the British side's court. It is not difficult for the Government to bear outstanding costs due to fluctuations in interest rates, which would be a few billion at most,'' he said. ''This is the most crucial point and the fundamental principle,'' he said. ''If that prerequisite is settled, other problems will be easy.'' He was quoted by the local co-convenor of the Preliminary Working Committee economic sub-group, Nellie Fong Wong Kut-man, as saying one of the remaining problems was how to monitor airport costs. More discussion was needed on which organisation should take up the job, she said. Other ''minor issues'' included the reservation of a sum for compensation in case the construction ended ''in a mess'', a source quoting Mr Zhang said. The ability of the Mass Transit Railway Corporation (MTRC) and the Provisional Airport Authority to raise loans, a point which the Hong Kong Government claimed was a key issue, was not a problem, he said. As long as the capping of the debt was resolved, the two bodies would be able to borrow without China's blessing. Mrs Fong said cost-control was essential to Hong Kong people: ''Although Hong Kong has strong financial reserves, we should not put all the money into the airport project, or taxpayers' money would be wasted.'' Separately, the sub-group said in a report that increasing land supply was not the only way to cool the overheated property market. The report, compiled by a sub-group committee on land and housing policy, urged the Government to speed up the processing of up to 200 hectares of private property development projects already submitted. This would help to increase supply of land in the short term. It also recommended that the release of extra land as suggested in the Government's package to curb property prices should be part of the annual land programme discussed and decided by the Sino-British Land Commission. The report acknowledged land and housing prices were a key factor affecting Hong Kong's competitiveness and people's livelihoods. ''We don't want to see great fluctuations in the property market before or after 1997,'' the report said.