Dominions Office telegrams have kept you advised almost hourly of developments in the situation. This information, however, is necessarily limited owing to impossibility of using telephone from Germany for any secret communications. Obviously the issue is whether the Prime Minister  in his discussions with Herr Hitler can agree to any modification of the substance in the Anglo-French proposals or whether he must adhere to them in their entirety.
Although the question may have been determined even before you get this cable it is desirable that I should give you an indication of the trends of thought here, particularly as there are differences of view.
Those who maintain there must be no modification of Anglo-French proposals point to the fact that public opinion in this country, in the Dominions and throughout the world has been aroused against dictatorial methods and threat of force employed by Germans.
That the announcement of the Prime Minister's intention to visit Herr Hitler aroused enthusiasm and hope but that those sentiments have progressively waned in the face of apprehension that the Prime Minister has yielded to threat and is submitting to dictation by Hitler. That this opposition will be immediately reversed if the Prime Minister stands firm for the Anglo-French plan when facts are known, namely:-
That the United Kingdom had long ago recognised that the Sudeten Germans had legitimate grievances and had continuously urged that they should be remedied. That during recent months United Kingdom had done everything in its power to bring settlement by agreement but had eventually come to the conclusion that this was impossible and that the Czechs and Germans could not continue in the same country.
In these circumstances the United Kingdom, in conjunction with the French, had formulated proposals and had obtained the concurrence of the Czechoslovak Government to them for the separation of Sudeten territory from Czechoslovakia.
That the Prime Minister had submitted to Herr Hitler proposals (these are set out in Dominions Office telegram 241 ). That these proposals met Herr Hitler's point that the Germans should go back into the Reich; that they provided for this being done by international action and preserved the principle of negotiation as against that of force; that they provided for justice to the inhabitants of the area by right of  opt and provision for financial compensation; that they provided a guarantee for the stability of new Czechoslovakia. That Herr Hitler's counter- proposal of immediate occupation by German troops was the application of the principle of force; that in practice it would destroy the possibility of affording justice to those citizens in the area taken over who desired to opt; and that any apprehension that Herr Hitler might have felt with regard to disorder in the districts pending the transference could have been met by other methods than the drastic step of occupation by German troops.
Those who argue in this way feel very strongly that the public is so aroused by the German's threat of force that were the Prime Minister to make any concessions beyond the Anglo-French plan there might be such resentment as would lead to defeat of the Government with incalculable results as there is no alternative to the Prime Minister that could be contemplated.
They further argue that such a development would not keep the Empire out of war as the new Government would be committed to aid Czechoslovakia but would only mean its being involved under even less satisfactory circumstances i.e. a distracted and divided people in the Empire and less possibility of co-operation from outside countries. They argue that if the Prime Minister took firm line now it would reunite our own people when facts were known and there would still be chance of stout resistance by Czechs and possibility of co-operation of other countries including Roumania and U.S.S.R. That if strong line is not now taken Czech resistance would be enormously diminished and the possibility of re- establishing a co-operative front against the Germans would be almost destroyed.
Those who hold the view that occupation of Sudeten areas by German troops should be agreed upon argue that the principle of Sudeten areas going over to Germany has been admitted and the method of maintaining order in the interior  is only question of procedure and that there is no fundamental objection to allowing this to be done by German troops. They further point to the fact that Hitler has indicated his preparedness to agree to subsequent plebiscite and to hand back to Czechoslovakia any area that might vote against the inclusion. They also base their arguments to a considerable extent upon our unpreparedness at the present moment and argue that if we can get over the present difficulties we will have a breathing space in which to strengthen our relative position as against that of the Germans.
As the Prime Minister has been given practically full liberty of action, Cabinet has come to no decision but is waiting on developments in conversations with Herr Hitler.