HONG Kong's first Chinese leader after the end of British rule has appealed to all sides in the democracy dispute to work together as the last colonial governor said China must stand by its promises.

Hong Kong, which returned to China in 1997, is bracing for a wave of protests after Beijing on Sunday ruled out fully democratic elections for the city's leader in 2017, sparking a political showdown with democrats.

First Chief Executive Tung Chee-hwa, 77, who was handpicked by China, said: "Hong Kong is our home, we have to work together. The only way out, and the only way forward, is through working together, hand in hand, otherwise there will be no end to bitter squabbles and the paralysis."

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A half-million strong anti-government rally forced the former shipping magnate Tung to step down in 2005, nearly two years before completing his second five-year term. He had faced criticism over plans for an anti-subversion bill amid widespread calls for greater democracy.

Chris Patten, the last British governor of Hong Kong who was in tears during the 1997 handover ceremony, said Britain had a moral and political obligation to ensure China respects its commitments.

He said: "We have a huge stake in the wellbeing of Hong Kong, with a political system in balance with its economic freedom."