In a meeting with Chief Executive Donald Tsang, British Prime Minister Tony Blair has commended the way Hong Kong affairs were being handled.

On the first day of a three-day visit to Britain, Mr Tsang said after the meeting at the House of Commons that Mr Blair "told me how he was impressed by the way in which Hong Kong matters have been handled well by the Central People's Government and by the Hong Kong Government since reunification - despite all the challenges that we have faced.

"He then said that there was continuous progress being made on democratisation."

Hong Kong calling: Chief Executive Donald Tsang gives an address at the Trade Development Council's annual dinner in London; meets with Lord Falconer; and briefs Prime Minister Tony Blair on Hong Kong's developments.

Briefing the media after his meeting, Mr Tsang said he had updated Mr Blair on Hong Kong's situation, including the latest package of proposals on constitutional development.

He and the Prime Minister had also discussed new opportunities arising from Hong Kong's increasing co-operation with the rapidly growing Mainland economy.

"I also reminded him about the potential for Hong Kong as the best platform for trade for British business people into the large Mainland market," Mr Tsang said. "I reminded him of the potential of Hong Kong and what we could do and offer, and the irreplaceable facilities that Hong Kong provides in establishing any commercial relationship with the Mainland."

The two leaders also discussed at some length the WTO Ministerial Meeting to be held in Hong Kong next month, as well as a critical meeting on agricultural issues being held next Monday in London involving the US, the European Union, India and Brazil.

Mr Tsang called the London meeting "a litmus test on the success of the coming ministerial meeting" and said Mr Blair told him "he would see the negotiators and put to them the importance he attached to the success of the ministerial meeting. He hoped very much that the Hong Kong meeting would be a great success."

In reply to a reporter's question, Mr Tsang replied the Hong Kong ministerial meeting "will go ahead." He said his confidence was based on "the efforts being made by all the parties concerned and by the effort we have made in Hong Kong, and by the fact that we are organising it and pulling all these things together."

He noted Secretary for Commerce & Industry John Tsang had been travelling around the globe, "putting all his strength and energies into this and he has the backing of the entire cabinet in Hong Kong and of myself. We are going to make it a success."

In the evening, Mr Tsang delivered the keynote address at the Hong Kong Trade Development Council Annual Dinner.

Mr Tsang told the audience how Hong Kong was leveraging its closer co-operation with the Mainland to help fuel China's dramatic economic growth, and to reap the benefits of it. In the process, he said, the horizon of business possibilities for British companies was expanding.

"The Mainland's growth will require a strong international financial infrastructure to sustain it," he said. "This is where the unique Hong Kong features come into this equation. Hong Kong provides that infrastructure."

The Chief Executive outlined how the Pan-Pearl River Delta co-operation initiative was designed to develop a huge regional economy in an area with a current population of 460 million - equivalent to that of the European Union.

On the Closer Economic Partnership Arrangement, the Chief Executive said the Mainland's rapid growth and accumulation of wealth meant that it was not lacking in capital.

"What it lacks are modern knowledge and management skills. Hong Kong has another key role to play here, as either a source or a bridge for the Mainland to acquire these skills and expertise. Hong Kong can help the Mainland raise the level of its service quality and ultimately transform itself from a 'relationship-based' to a modern 'rules-based' market economy."

He said Hong Kong was serious about protecting intellectual property, and was well known for its sound legal system, well-regulated market and adherence to international business standards.

"It's a place where foreign investors feel safe to operate and manage their investment in the Mainland. Indeed, since 1997, the number of overseas companies with regional operations in Hong Kong has risen by over 50%, to nearly 3,800 - confirming Hong Kong as the most popular place in Asia to establish a base, and as the premier platform for doing business in the Mainland and around the Asia-Pacific region."

Earlier in the day, Mr Tsang met with Lord Charles Falconer, Secretary of State for Constitutional Affairs and Lord Chancellor, and with the Executive Committee of the Hong Kong Association. At both meetings he provided updates on Hong Kong's economic and constitutional development, and discussed other major issues including the Hong Kong WTO Ministerial Conference.

Tomorrow, the Chief Executive is scheduled to deliver a speech at a Wilton Park Conference in West Sussex on "The Future Role of Hong Kong in the Region", during which he will bring participants up to date on Hong Kong's constitutional development.

He will also meet with Mr Ian Pearson, Minister of State for Trade, and introduce a joint concert of the Hong Kong Academy for Performing Arts and the Guildhall School of Music & Drama.