what should be done with them in the face of military cuts.

Premier the Hon. Sir John Swan said yesterday that two committees have been formed over the last few weeks to examine the issue.

Bermuda has not been told that the US Navy will pull out completely, he said, and would do everything possible to persuade the US not to do so.

But Bermuda cannot ignore the message contained in the closing of US military bases in other countries as well as the US itself, he said, and talks with the US Navy Secretary and other US officials have provided no guarantees that the base will remain open.

"One has to be concerned,'' he said. "What we can do is to make our desires and wishes known to the appropriate people in the US, and try to minimise the potential fallout.'' Over the last few weeks, a technical committee has been put together to examine base property, inventory and buildings, and the leases held by US and Canadian governments.

An assessment is already going on in the Department of Works and Engineering, Sir John said, "but we are now going to review all of the details.'' A second committee, headed by Government's former Senate Leader Mr. Charles Collis, is being formed to look at possible future uses for the land "that can turn it into a money-earner,'' Sir John said.

The Ministry of Finance is already updating information about the role of the bases in the Island's economy, he said.

In March, the Canadian Government announced that its base at Daniels Head would close by April 1994. The US Navy, which is planning to close the US Naval Annex in Southampton next year, publicly announced a few days later that it planned a 60 percent cut in military personnel by the end of 1983.

At the time, US Naval Air Station commanding officer Capt. Jim Arnold warned that more cuts were likely.

According to the 1987 Archibald Report, the US Navy and its personnel spent $27.1 million a year in Bermuda, generated over 550 jobs, affected another 470, and contributed $11 million annually to the Island's balance of payments.

But the Navy has already made considerable cuts since 1987, and these figures are considered badly outdated.

Among the US Navy contributions -- which the Navy so far has said it does not plan to eliminate -- are providing weather information, air control tower facilities and maintaining runways for civil aviation as well as its own planes.

"My hope is that they will not close,'' Sir John said. "It's a vital facility to us and we've benefited enormously from its presence.'' He said Government will seek "by every possible means'' to minimise any withdrawal from the US base.

The other important response, he said, is to make sure Government does everything it can to improve foreign earnings from tourism and international business, while developing new sources of income.

This is important for Bermuda at any time, he said, but recession, international economic changes, low tourist spending -- and the uncertainty over the bases -- make it especially important.

"We have got to find ways in which we can improve our foreign currency earnings,'' Sir John said. "...It's important not to sit back and do nothing,'' he said.