A legal team hired by Pakistan at the high profile Washington lobbying firm of Patton and Boggs has prepared a brief for litigation if the matter is not sorted out by the year end. And from the looks of it, that is just what might happen even though both sides are aghast at the possibility.

Although US officials said last week that the two sides are `closer to an agreement on the matter than ever before,' Pakistan is said to be dissatisfied over the terms of the deal offered by Washington which involves leasing and later perhaps sellingthe planes to New Zealand. Under the deal, New Zealand will lease the planes for ten years paying $ 12.5 million each year with an option to buy the lot at the end of the period.

But New Zealand is said to have budgeted only $ 200 million for the whole deal. Pakistan paid $ 657 million for the 27 planes. The unresolved question is how to reimburse Pakistan the full amount. Islamabad is also looking for interest payment on the amount and a waiver of the demurrage and storage charges.

New Zealand has said Pakistan has nothing to do with the deal and it will remit the lease money directly to the United States. Washington has devised various formulas to reimburse Pakistan, including loans and food aid, but Islamabad is said to have rejected these proposals as not being enough. With its foreign exchange reserves down to less than $ 400 million, Pakistan desperately wants hard cash quickly.

Pakistan has lobbied hard to resolve the matter using the services of Lanny Davis, a former White House counsel who nowworks for Patton and Boggs. But sources said the efforts had come to nought.

Davis did not return calls seeking comment.

The sources said Pakistan had made up its mind to take the matter to court if no satisfactory formula was found in the next three weeks. Islamabad's threat has put the Clinton administration in a tizzy and there were clutch of meetings on tuesday in the state department to thrash out the issue. One of the ideas on the table is a proposal by Sen. Sam Brownback which envisages supplying wheat to Pakistan in lieu of the money.

Meanwhile, there is unhappiness in media and defence circles in New Zealand over their government's decision to lease the f-16s. Experts there are arguing that as a largely maritime country, New Zealand would have been better served by investing in a third frigate, as it was budgeted to do.

``The Government has got it wrong. It has decided against buying a third Anzac frigate, but has agreed to lease second-hand F-16 aircraft... taken together, the twodecisions go against common sense. New Zealand is a maritime nation. Our hemisphere is almost all water. Most of our trade is carried by sea. New Zealand must exercise significant seaborne influence if it is to protect important trade links. That opportunity has been passed up,'' the Christchurch Press said in an editorial.

The paper, described as New Zealand's second largest, said the decision to lease the American-made F-16s `goes against plans detailed in last year's defence White Paper' which suggested weapons of its existing Skyhawks' jets be upgraded and the aircraft used well into the next decade.

``Instead, the Government has opted to lease strike planes better suited to the needs of a bigger country. Whee is the threat they are supposed to address?'' the paper asked.

Government circles there have however argued that the F-16 deal came cheap enough for New Zealand not to pass it up. A New Zealand team which inspected the planes parked in the Mojave desert also found them in excellentcondition.

Air force spokesman Squadron Leader Paul Harrison was quoted as telling the local media that the F16s had the standard Nato weapons fittings. It was initially thought that because they were designated for a third-world country, the Americans may not have given the Pakistanis the full compatibility with Nato standards or the latest technology.

``When the engineers looked at the aeroplanes on the ground and saw what the Americans were offering in the package, they said `these things are a fly-away-and-go-to-war-today' type of aeroplane,'' Sqn Ldr Harrison was quoted as saying.