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The debate over how to solve Hong Kong's housing crisis continues, with delegations now planning to lobby Beijing for a solution.

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ELIZABETH FARNSWORTH: Next, a Hong Kong update. As the island adjusts to Chinese rule, a debate has erupted over the best way to solve the housing crisis. Ian Williams of Independent Television News reports.

IAN WILLIAMS, ITN: For generations, Fan Zhou Sang's family have fished in the waters around Tajo. The tiny village, built on stilts above the bay, has been largely left behind by the sweeping changes that have turned Hong Kong into one of the world's most modern cities. And Mr. Fan would like it to stay that way. Life for him goes on much as it has done for decades. While it's become harder to make a living from the sea and many of his fellow villagers have left for other parts of Hong Kong, those who remain have doggedly kept development at bay.

They've resisted government pressure to move out of their rickety homes, demanding better compensation but also protection for their way of life. And he and his fellow villagers blame the old British authorities. They've an almost innocent belief that now China's in charge they'll be left alone, or at least their voices will now be heard. And Mr. Fan says they're preparing to send a delegation to meet officials in Beijing.

FAN ZHOU SANG, Fisherman: (speaking through interpreter) We'll ask the Chinese government to get us the best place to live, somewhere simple, so we'll have a place to keep our boats and nets and can continue to fish. We've been doing that for decades. We can't change now.

IAN WILLIAMS: Taio is the oldest fishing village in Hong Kong, but one of only a handful of settlements on Lantau Island, which is the biggest of more than 200 islands in the former British colony. For the most part, it remains unspoiled wilderness. Half the island is country park., but plans now being considered by the government would bring massive development to Lantau, with Taio's picturesque harbor reclaimed from the sea, the village swept aside to make way for one of its series of hi-rise estates.

The man behind that plan is Raymond Ho. He's a government adviser with 30 years' experience of planning in Hong Kong and he's urging the new government to rapidly develop Lantau as a solution to an impending housing crisis.

DR. RAYMOND HO, Consultant Engineer: On this island, which is the largest in Hong Kong, we can put up houses in the northern part of the island and also in southern part--southeastern part of the island, and also in areas such as, you know, behind this hill here, building up a new town called Teng Chung. We can easily accommodate 1 million, or even up to 1.5 million people.

IAN WILLIAMS: Dr. Ho's proposals are now on the desk of Hong Kong's new leader, who says housing is his priority. Before his selection as chief executive, Teng Chi Hwa made a much publicized visit to squatter homes and pledged to concentrate on what he called livelihood issues. And those issues are very real here. An estimated ½ million people--many living in old and cramped conditions--are waiting for new public housing. The waiting list is at least six years long.

Hong Kong is already one of the most crowded places on the planet, but the population is predicted to grow by nearly 2 million to more than 8 million people over the next 15 years. Hong Kong has been quick and inventive in the past. In the 1970's, after a huge influx of refugees from China, a massive decade-long building program succeeded in housing nearly 2 million people. And Hong Kong reclaimed land from the sea, so much so that the famous harbor is now only half its original width. And Britain handed back to China 40 square miles more than she took in the first place.

Under the Lantau proposals, the fishing grounds around Taio would also be reclaimed. Ironically, local fishermen might find their strongest allies in fighting this are Hong Kong's property tycoons. They see government reclamation as a threat to the value of their existing land holdings. Much more is at stake than the fate of one tiny village, though it does seem only a matter of time before development reaches the shores of Taio.

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