EDINBURGH District Council will decide next week whether to break off

links with Xi'an, its twin city in China, after receiving a hard-line

response from the authorities in Xi'an to Edinburgh's condemnation of

the ''savage repression'' of the students in June.

Councillor Mark Lazarowicz, leader of the Labour administration, said:

''We have just received a reply to our telex in June and in it Xi'an's

authorities clearly back up the official line in China. We now have two

options: to break off relations entirely or put it in cold storage until

there are changes in the situation.''

Edinburgh councillors telexed concern over the fate of 12 Edinburgh

University students in Xi'an at the time of the unrest and condemned the

Government repression, expressing the hope that no-one in Xi'an took

part in it or supported the Government's decision.

However the reply Edinburgh received from Xi'an, signed by Deng

Youmin, director of foreign affairs, describes Edinburgh's telex as

''groundless accusations against quelling the counter-revolution''.

Deng Youmin added: ''The rebellion was stirred up by a small handful

of evil doers trying to overthrow the leadership of the Chinese

Communist Party and subvert the Socialist People's Republic of China.''

He went on to defend the Chinese Government's action as ''putting down

the riot according to the Chinese constitution and laws and was in

keeping with the fundamental interests of the Chinese people''.

Whereas Xi'an still wants to maintain the link with Edinburgh,

established four years ago, Councillor Lazarowicz said: ''Although it

has been very useful we cannot countenance links with what is very

clearly a repressive regime.''

The twinning link originally got off to a highly successful start when

Edinburgh held the Emperor's Warriors exhibition which attracted 220,000

visitors for three months in autumn 1985. The warriors were part of the

vast army of terracotta figures discovered, buried underground, near

Xi'an in 1974.