MACAU, Dec 20: Chinese President Hu Jintao on Monday gave an unprecedented public dressing down to Hong Kong's leaders, a day after the territory's government was forced to postpone a major public property sale.

At ceremonies to mark the fifth anniversary of the return of the former Portuguese colony of Macau to Chinese rule, Mr Hu told Hong Kong Chief Executive Tung Chee-hwa and his cabinet their performance must improve.

"Our hopes are that officials of Hong Kong will put Hong Kong's interests and the long-term national interests first. You must be more united and cooperative and supportive of each other," said Mr Hu.

The cabinet stood stony-faced as Mr Hu said the Hong Kong government "must be more concerned with the people of Hong Kong" and analyse problems which have unsettled the territory since its return to Chinese rule in 1997.

"Officials must also improve their capabilities and abilities to govern. The officials must turn back and look over the past seven years and find out what has gone wrong," Mr Hu said.

But at a press conference in Hong Kong after returning from Macau, Tung appeared smiling and said he had been simply "reminded" by Mr Hu of the "inadequacies" in the governance of Hong Kong, and dismissed suggestions the president was lecturing him.

"It was an expectation he had for us. He hoped that we can improve the level of the governance, which I think is a good thing... and of course we would want to do better," he told reporters.

"We had a very good meeting. He was very supportive in the work we are doing... Hong Kong is moving towards the right direction," added Tung, who was handpicked by Beijing to run Hong Kong when the British colony returned to Chinese rule in 1997.

Mr Hu's criticism of Tung follows a tumultuous year for the territory culminating in Sunday's embarrassing decision to postpone the three billion dollar listing of the world's largest property trust.

The government's housing authority was forced to postpone Hong Kong's first property investment trust - vital to plug a large public deficit - after a lawsuit from an elderly tenant challenged the legality of the sale.

Hong Kong's lower courts have rejected the legal challenge, but the Court of Final Appeal last week gave the plaintiff 28 days to decide whether to appeal, forcing the postponement of the listing.

The affair is seen as a blow to Hong Kong's status as one of Asia's leading financial markets. Commentators and newspapers on Monday strongly criticised the Hong Kong government's handling of the issue.

"The incident clearly shows weakness of the government for failing to secure the support from a majority of legislators... it strongly reflects the Hong Kong government's management problems," said the Ming Pao daily.

The real estate investment trust (REIT) fiasco follows several years of growing dissatisfaction in Hong Kong about the territory's leadership and the lack of democratic reforms.

CONTRAST WITH MACAU: The problems in Hong Kong since its return to China have contrasted with events in Macau, which sits just 60 kilometres further west on the southern Chinese coast.