210 Mr A. Eden, U.K. Secretary of State for Dominion Affairs, to Commonwealth Government
Cablegram 138 LONDON, 4 May 1940, 1.45 a.m.
IMMEDIATE MOST SECRET
My telegram No. 131 to the Commonwealth and No. 126 to New Zealand. 
Following is the appreciation by the Chiefs of Staff asked for.
Intervention of Italy 1. If Italy decided to intervene she will probably time her entry to coincide with a new development in the West which might be a German attack on the United Kingdom or the Western Front, or invasion of another neutral State. Neither the Italian army nor the Air Force is in good condition for War and it is probable therefore that the Italian plan will be to use her Navy to dispute Allied control of sea communications while using other arms for raids and diversions.
2. Probable Italian action would be either an invasion of the Dalmatian coast or Corfu which would no doubt eventually result in War with the Allies, or direct attack on Allied interests in the Mediterranean and the Red Sea.
3. There is a possibility which is regarded as remote, that Spain might enter the War with or soon after Italy in which case Gibraltar could not be used as a Naval Base and an increased Naval effort would be required in the Western Mediterranean, particularly if Italy should occupy the Balearic Islands.
4. Our primary object will remain the defeat of Germany, and it will be appreciated that with our existing commitments in Norway, on the Western Front and at home our first aim in the Mediterranean and Middle East must be to ensure the security of Allied shipping. Measures to achieve this aim will automatically cut Italy's communications with the outer seas and the[n] immediately impose economic pressure, and will also isolate her East African possessions.
5. Measures are now being taken to re-concentrate the Allied Naval Forces in sufficient strength in the Mediterranean-the British being generally responsible for the Eastern Basin, the French for the Western. As regards the Red Sea, we do not anticipate serious difficulty in meeting surface or submarine attacks, but consider it inadvisable to expose troop convoys to the risk of air attack from East Africa in the early stages of the War.
6. In addition, Allied plan provides for local offensives as soon as they can be organised; in particular the French from Tunis against Libya and the Allied forces from Djibouti into Abyssinia.
These would take time to stage. Plans are also under discussion with the French for taking action against war industries in the North West of Italy which we consider would be the quickest and most effective way of bringing possibly decisive pressure to bear.
Balkans and Turkey 7. With regard to the Balkans and the Near East, the situation will depend upon whether Italy attacks Yugo-Slavia or Greece, or whether Germany invades the Balkans. We shall not be able to give direct support to Yugo-Slavia or Greece until the threat on Allied communications through the Aegean Sea has been countered.
8. We hope that Turkey will join with us against Italy in which case Allied support will be provided initially through the Anatolian railway until communications through the Aegean can be restored. With Turkey on our side the Bosphorus may be closed to Italy and open to the Allies.
North West Frontier of India 9. The only power which could seriously affect our interests here is Russia. Italian intervention by itself would have little if any effect. The present situation in this part of the world is satisfactory and the attitude of Afghan Government vis-a-vis Russia reassuring. The possibility of a flare-up of tribal trouble always exists.
10. The army in India is fully adequate to deal with any situation in tribal territory and Russia cannot maintain land attacks on India for a long period. A limited scale of air attack on centres in Northern India is possible and might lead to local internal security problems. We have recently equipped two Blenheim squadrons in India with fighter conversion sets, which would act as some deterrent. The Russian invasion of Northern Afghanistan would be a more formidable danger. The Government of India is investigating the possibility of helping Kabul Government to maintain authority in emergency.
11. The whole tendency of Russian policy is, however, to avoid being drawn into major War after their experiences in Finland. We regard Russian intervention against us as unlikely.
Far East 12. The Foreign Office view is that Japan's ultimate policy will be decided by the outcome of the war in the West. Meanwhile Japan remains very heavily committed in China and fears American policy.
Her early intervention is therefore unlikely. The general indications are that America's reactions to any Japanese aggression in the Pacific would be very strong. The Chiefs of Staff consider the possibility of a direct attack on Australia and New Zealand as very remote.
Australian and New Zealand Forces 13. The intention has always been that Australian and New Zealand contingents when fully equipped should be employed according to demands of the strategic situation. The most likely theatres are the Near East and France. If War breaks out with Italy it is hoped that it will be possible to reconstitute the Red Sea route within the first three months. Full War scale of equipment for Australian and New Zealand contingents will probably be ready by mid- September. There should, therefore, be no difficulty in reconstituting the complete and fully equipped diversions [sic] either in Egypt or in the United Kingdom by that date at the latest.
14. The anxiety of the Commonwealth and New Zealand Governments in the event of diversion to the United Kingdom at the present time and the inherent disadvantages in the splitting of formations are realised. All possible steps would be taken to reconstitute the whole of the Expeditionary Force at the earliest possible date.
Meanwhile, if it is found necessary to divert U.S.2 and U.S.3 to the United Kingdom, it is suggested that the Liaison Officers from the Australian and New Zealand Forces in Egypt be attached to these contingents. If the Commonwealth and New Zealand Governments agree, this could be arranged from here.
15. The possibilities of diversion to India and Kenya have been examined. As regards India, the difficulties are the complete lack of modern training equipment and suitable accommodation in hot weather. In Kenya, there is no suitable accommodation at all. If U.S.2 and U.S.3 were diverted by [sic] either of these countries, the ultimate reconstitution and equipment of the whole of Expeditionary Force would, it is thought, be almost certainly unavoidably delayed.
16. Having regard to the above considerations it is recommended in the present circumstances diversion is unnecessary and the convoys should adhere to their programme. The situation is being watched from day to day and the Admiralty would issue orders for diversion if the situation should at any time demand it. In that event diversion to the United Kingdom is recommended.
The Admiralty is telegraphing separately arrangements for escort and security in the event of diversion.