There is a mention in Paddy Ashdown's autobiography describing when he was in the SBS in the 1960s and they were sent undercover posing as tourists to beaches in Hong Kong to evaluate their suitability as evacuation points should China invade.

Britain proposed to turn HK into a self-governing dominion like (non-democratic) Singapore - aka grant HK dejure independence from China - which obviously China would reject since it would circumvent handover. Hence ZhouEnlai labeling it as a plot / conspiracy. Most of the Thatcher memo was about trying to maintain British "control"/administration post handover to help with investor confidence (and British influence).

This QZ article is repeating a fairly disingenuous interpretation of the documents to suggest some missed opportunity for democratic reforms. The original narrative was put forth by VJMedia which bias towards HK local-ism (pro-independence). There was never any effort in the 60s up until years before handover to grant subjects of HK liberties or self-governance within the context of Extension of Hong Kong Territory lease.