Government minister that Bermuda will need formal UK authorisation to negotiate the closure of the Base with the US.

Sir John is also expected to inform Mr. Mark Lennox-Boyd, the Foreign Office junior minister responsible for Bermuda, of the latest developments in the Bases issue.

Mr. Lennox-Boyd, the UK Parliamentary Under Secretary for Foreign and Commonwealth Affairs, is visiting the Island for the first time and is expected to stay for about 24 hours.

Sir John made it clear in discussions in Washington this week that Bermuda must have the power to negotiate its own future on the Base issue. Deputy Governor Mr. John Kelly last night indicated the UK would have no objection to the go-ahead. However, there may be disagreements on its timing.

Bermuda may want it sooner than March when the US Defence Department is required to submit to Congress a plan to close the base by September, 1995.

In a brief meeting yesterday morning at Raleigh-Durham airport with Deputy Premier the Hon. Irving Pearman and assistant Cabinet secretary Mr. John Drinkwater, Sir John outlined the first steps Government must take in order to come to grips with an issue he considers the "biggest single challenge'' in Bermuda's history.

His first consideration was to determine the role the British would play in preparations for Base negotiations.

He also asked for a report on the resources the Island will need to effectively negotiate a new arrangement as well as the takeover of essential operations such as air traffic control.

The Premier also wanted to make sure the ground rules for negotiation were worked out beforehand. For example, he said, there should be a procedure to send disagreements to arbitration.

The Bermuda plan could be organised into five committees that include: A legal committee to analyse the US-UK (Bermuda) Bases Agreement that led to the creation of the US Naval Air Station. Its analysis is expected to define such issues as the lease arrangement that governs the US presence in Bermuda; An air operations committee to review the international requirements for operating a commercial airport; A Base facility committee to draw up an inventory of buildings, installations and equipment that Bermuda would need to take over. Its assessment would also focus on the requirements and costs associated with their day-to-day maintenance and use; A committee to assess how the Base land could be best used to serve Bermuda's future. Early talk has focused on the need for an "industry'' to generate foreign revenues to replace the millions spent in Bermuda each year be the US Navy; and A negotiating committee to go face-to-face with the US team.

"The whole exercise will be conducted to avoid a major squabble,'' Sir John told the airport meeting.

In the aftermath of Tuesday's meetings in which US and NATO military chiefs said the Base would definitely close in September, 1995 and that it had no military value in the forseeable future, the Premier said more than once: "Bermuda will not be the same.'' The new reality will see a Bermuda operating without the key military pillars in the economy that helped give the Island wealth.

The Premier said the challenge will be to somehow recover almost ten percent of the gross domestic product the loss of US base spending represents, along with the costs of operating its facilities will impose on Bermuda.

That burden, which Sir John equated in permanent impact to 50 percent of the recent recession, would be felt in loss of rental incomes, tax revenues, retail spending and possibly Government services.

Despite the prospects, the Bermuda delegation this week was clearly energised by the challenge of the Base issue.

Sir John and Mr. Pearman both said they saw the base issue in terms of opportunities.

The Premier was particularly concerned that key planners understand that the real challenge for Bermuda lay beyond September, 1995.

"We need to be able to shift our thinking beyond this process to seek opportunities,'' he told the airport meeting.

Last night, Opposition leader Mr. Frederick Wade demanded the Premier report to the House of Assembly tomorrow on the Base issue.

Mr. Wade said it was vital Bermuda take full legal possession of the Base land after September, 1995. He also said it was important that Bermuda find a way to manage the opportunity posed by the closure.

"We need a Bermuda plan,'' he said. "We haven't got one yet.'' Mr. Wade also insisted that Bermuda secure the power to negotiate with the Americans. "We need the power to do it ourselves,'' he said.

He had assumed the Premier had secured authorisation from the UK earlier this year and was surprised to read that the Americans wanted notice of it.

Earlier, Opposition Senator Milton Scott said the Premier should have won permission to negotiate the Base closure before his Washington trip.

"We as a people expect to see more responsible leadership in this area,'' he told Senators.

In a June meeting in London, Prime Minister John Major gave the nod to Premier Swan to lobby Congress on the Base issue.

In Washington this week, Admiral Kelso told the Premier that the US State Department would need formal authorisation from the British Embassy to begin direct negotiations with Bermuda.