FOR THE PRIME MINISTER MOST SECRET PERSONAL FOR HIMSELF
Definite feeling of War Cabinet is that German-Soviet Agreement will not be expanded into military alliance and that Soviet will not give military assistance to Germany. This, however, is merely a feeling, without any substantial evidence, and I am not convinced that it is not wishful thinking. No Chief of Staff's appreciation has been under consideration. Present intention is to make no reply to German-Soviet statement until the Prime Minister  speaks on Tuesday  in the House of Commons. Winston Churchill  broadcasts tomorrow night, but will not deal with it. Form of Prime Minister's speech is not yet determined.
I have urged strongly that every effort should be made including pressure by the Vatican and Franco  to prevent Mussolini  allowing himself to be used by Germany in connection with 'peace offensive'. Also that plans must be formulated immediately for intensive diplomatic action in Rome, Washington, Tokyo, Burgos and Near East in anticipation of the possibility of the German-Soviet Agreement becoming a military alliance.
Dominance presents such dangers to all these countries and in fact to the whole world that it should be possible by resolute skin and constructive diplomacy to build a strong front against the common danger.
I confess that I am not hopeful and consider that it will require more vision, determination and skill than British diplomacy has recently shown if anything is to be accomplished.
I take a most serious, I hope too serious, a view of the situation. I feel that it is not being faced as it should be and that it is imperative that I should send you my views for what they are worth .