Foreign and Commonwealth Office officials yesterday recommended a two-stage process for changing Bermuda's Constitution and insisted progress had been made in clearing up some issues.

They flagged recommending amending the Constitution to allow the Boundaries Commission to be set up and that its proposals to redraw boundaries and reduce the number of MPs be sent to Foreign Secretary Robin Cook.

There would then be a cooling off period when Britain and people in Bermuda would look at the implications, including what size the Cabinet should be.

It is thought the Foreign Office hopes that after the Boundaries Commission reports, a consensus will emerge in Bermuda on the number of MPs and calls for a constitutional conference and referendum will recede.

FCO deputy legal advisor Ian Hendry made no reference in his statement at Government House yesterday on United Bermuda Party demands for a constitutional conference or referendum, but insisted "nothing is off the table at the moment''.

However, the indications are that the FCO team, which spent four days in Bermuda canvassing public opinion, has essentially accepted the Progressive Labour Party's plans -- for a Boundaries Commission to draw up single-seat constituencies and reduce the number of MPs -- while taking on board concern about the process and implications for Cabinet of slashing MPs.

After Mr. Hendry's press conference at Government House yesterday, Premier Jennifer Smith said she was "cautiously optimistic''.

She said Government had always been in favour of a two-step process, with the Constitution amended first to allow the Boundaries Commission to redraw seats.

But Opposition leader Pamela Gordon said the UBP still insisted on a constitutional conference and referendum.

And she described the two step proposal as an FCO "appeasement'' to address people's concerns because the PLP had not adequately included Bermudians in the process.

Mr. Hendry said: "The FCO team considered a two-stage process would offer a fair and logical way forward.

"Decisions on all these matters will, however, be for the British government, not the FCO team itself.

FCO officials back `two-step process' But the meetings and consultations this week will enlighten and assist the decision-making process.

"We have heard, obviously, a great deal of concern expressed that certain practical decisions should be put to the people in a referendum, and we shall report that to the government in London.'' But hinting that a referendum will not be recommended, he said the consultation process in Bermuda this week had been more inclusive than traditional constitutional conferences which involve only the main parties.

Mr. Hendry also rejected claims by lawyer Warren Cabral in yesterday's Royal Gazette that there is an automatic requirement for constitutional conferences for major changes to the Constitution. See story on Page 5.

He continued: "We didn't come here to decide matters on behalf of the British government. We'll take back and report on what we've learned and progress in some areas, and hope we have clarified in our minds the implications of some of the proposals.'' He said he had not been "alarmed'' by anything he had heard at the public forums or written submissions.

There was no timetable for when the Foreign Secretary will make a recommendation to the Privy Council for an Order in Council to amend the Constitution.

He said there was little or no controversy over the PLP's plans to create an Ombudsman, rename Parliamentary Secretaries as Junior Ministers, and to make the Auditor, Auditor General.

Afterward, the Premier told reporters: "I am cautiously optimistic. The statement made was non-committal, so I'll await the decision of the British government.

"We've always said its a two-step process. Initiated in the Constitution was the provision that the Boundaries Commission cannot go outside the parish boundaries and for that to happen you had to change the Constitution.

"If it's not in the Constitution we need to change it until it can report.

It's a practical and logical means of proceeding.'' Ms Gordon said: "We believe Bermudians are entitled to a fully thought-out single process rather than a two step process and the FCO is trying to create an appeasement situation because the Government didn't take into consideration the people when trying to make constitutional change.

"As a result of the FCO being here, they have seen the outpouring of concern that so many Bermudians have and we believe the two-step process has been recommended to try to reduce some of this.

"Had the Government done it correctly, there would not be the need for the two steps and it would be put forward to the people of Bermuda, but that's not to be.''