However, Democratic Party legislator Albert Ho thought the Legco report was too mild and said he hoped the three-man independent panel now investigating the case would recommend that Leung be disciplined for his decision which enabled Henderson Land to nearly double the development in Sai Wan Ho.

For his part, Leung said he disagreed with the findings of the Legco report but would not make any further comment until after the independent panel had arrived at its conclusions.

In its report published Wednesday, the Public Accounts Committee said it found Leung's decision to grant Henderson Land an extra area of 10,700 square meters in lieu of a bus terminal to be totally unacceptable as he had not attached due weight to other factors before coming to his decision.

The committee said that when Leung agreed to give the developer extra land to compensate for the bus terminus, he had ignored the fact that the terminus was part of the lease conditions.

He had also failed to take into account the difficulty likely to be faced by the Lands Department in charging the developer additional land premium, or the increased development intensity and the possible obstruction to air flow that would result from increased building at the site.

It said Leung's decision, compounded by the change of the site classification after the land sale, had enabled Henderson Land to boost the gross floor area of the project from 85,720 sqm to 135,451 sqm, resulting in a possible loss of HK$125 million in land premium to the government.

The committee said that had the terminus been excluded from the gross floor area calculation at the outset, both the reserve price of the site and the tender price offered by the successful bidder might have been higher.

Leung's decision was also unfair to other tenderers as it increased the value of the site after the sale had been completed, the report said.

In a statement issued last night, Leung said he did not agree with the views expressed in the Legco report.

"But I don't think it will be appropriate for me to offer further comment at the present stage, so as not to affect the work of the independent investigation panel and its fairness," Leung said.

Committee chairman Philip Wong said none of the seven members on the committee had suggested the use of the word "condemn" in the report.

"However, if you add together the criticisms we made, the committee's censure was probably more severe than the word `condemn' would imply," he said.

Another committee member, Lau Kong-wah of the Democratic Alliance for the Betterment and Progress of Hong Kong, said it was not necessary for a Legco committee to use the strongest possible words to censure errant government officials.

However, Ho insisted that Leung had erred in that he had ignored the professional advice of other departments when coming to his decision.

He thought that the Legco committee's criticism was not sufficiently severe and he hoped the government would take further action.

"We hope the government and the three-person investigation panel will consider taking disciplinary action," Ho said.

Secretary for the Civil Service Denise Yue said no action could be taken until after the three-person panel, headed by Court of Final Appeal judge John Barry Mortimer, submitted its report to the chief executive next month.

Leung announced his retirement before the saga blew up and began his pre- retirement leave in November last year.

Should Leung be found guilty of negligence, he could forfeit his severance pay. A Housing, Planning and Works Bureau spokesman said current laws empower the Building Authority, a position Leung also held, to exercise its discretionary power in certain circumstances.