Lam said after a meeting with about 100 diplomats and chamber representatives on Tuesday that two areas of “concern” had been raised. He added these involved the legislation’s provisions for state secrets and foreign interference, but stressed that no “worries” were brought up.

He added that he had heard no objections to the proposed law at the meetings and that residents and “foreign friends” understood Hong Kong had a constitutional responsibility to enact its own national security legislation.

But a diplomatic source on Wednesday disputed Lam’s description of the meeting.

“There were serious concerns raised, in particular in relation to the very broad definitions and provisions on state secrets and external interference, which could potentially have serious consequences for foreign citizens and businesses and diplomatic missions in Hong Kong,” the source said.

Lam and Tang on Wednesday morning held a closed-door meeting with the Hong Kong General Chamber of Commerce as well as 13 international business groups, including those representing British, Australian, Malaysian and Italian firms, as part of efforts to allay fears.

Betty Yuen So Siu-mai, the Hong Kong chamber’s chairwoman, said she supported the legislation, but added that attendees wanted the government to provide “more clarity” on how offences, such as those involving state secrets, would be defined.

Yuen added there appeared to be a “high bar” for accidental disclosure of state secrets during business dealings.

“We did not hear any concern this morning about inadvertently disclosing state secrets,” she said.

Yuen also dismissed a question on whether companies would need to make preparations before the legislation was implemented and insisted businesses that did not intend to break the law had no need to worry.

She added the meeting had involved “frank exchanges” between members and government officials and attendees had encouraged authorities to do more to explain the legislation and help “allay potential fears that the public may have”.

A local national security law is mandated by Article 23 of the Basic Law, the city’s mini-constitution, and will create a string of new offences.

These are: treason; insurrection, incitement to mutiny and disaffection, and acts with seditious intention; sabotage; and foreign interference and theft of state secrets and espionage.

The legislation will sit alongside the Beijing-imposed national security law, which outlaws secession, subversion, terrorist activities and collusion with foreign forces.

Public consultation on the new legislation will end on February 28 and the government has said it planned to put the bill to the legislature this year.

The 110-page consultation paper suggested updating the Official Secrets Ordinance to cover seven types of “secrets”, including information on major policy decisions about national and city affairs, the economic, social, technological or scientific development of the country or city, and the external affairs of Hong Kong and its relationship with Beijing.

The paper also recommended the introduction of a new espionage offence that would ban anyone from involvement in, or backing or receiving advantages from outside intelligence organisations.

It also proposed a new external interference offence to target several acts, such as attempts to influence the city and central governments in the formulation or execution of policies.

Attempts to tamper with city elections or the work of the legislature in collaboration with outside forces would also be targeted.

Additional reporting by Harvey Kong and Oscar Liu