Had long conference on Saturday with joint Planning Committee of General Staff The discussion which was quite informal and unofficial was most valuable, and has done a lot to clear the air. In opening the discussion I indicated that I had been in a grave difficulty in communicating with my Government because I had been unable to obtain a clear picture of our immediate and long-range strategy in the war, that it was impossible to expect the Australian Government to feel other than extremely anxious in her co- operation if she had not a clear picture of what was in the minds of those who were responsible here for the conduct of the war. In particular I instanced recent request to send a Division to Malaya.
The reasonableness of this point of view was admitted and the result of some two and a half hours question and answer and discussion could be summarized as follows:-
That there are two problems with which we are faced today: (i) Immediate- to deny victory to the enemy. (2) Long-range-to defeat the enemy.
With regard to (1) the immediate objectives must be (a) to prevent the invasion of these islands and (b) the maintenance of the necessary fleet bases in the United Kingdom.
The achievement of these objectives requires (1) the organization of naval, military and air forces and civil population for defence, (2) the prevention of French Fleet falling into enemy hands, and (3) the protection of our vital sources of production for the achievement of (a) and (b).
We accepted that all possible steps to achieve these objectives were being taken (though with some reservations on my part) and did not pursue them.
We agreed that while the safeguarding of our essential interests in all quarters of the globe must be subsidiary to (1) certain interests are so vital to our long-range objective of defeating the enemy that the risks in regard to (1) may have to be incurred, just as risks with regard to our fighter Air Force were recognised as essential in order to endeavour to prevent Germans reaching the Channel Ports and to defeat their offensive southwards against Paris, so it may be necessary to run similar risks with regard to the Air Force if they are necessary to prevent our naval forces being compelled to withdraw from the Eastern Mediterranean.
With regard to (2) the objectives are (a) effective blockade, (b) establish air superiority, (c) training and equipment of adequate land forces.
With regard to (a) necessary that (1) British Fleet continue to operate from bases in the United Kingdom.
(2) The flow of supplies into the Mediterranean be stopped.
(3) Our policy be decided on and resolutely adhered to even if effective blockade leads to charge that United Kingdom is destroying and starving Europe, including our Allies and innocent countries overrun by Germany.
With regard to (1), as this necessary for protection of United Kingdom, the steps to insure it call for consideration under the heading of immediate objective.
With regard to (2) maintenance of naval forces in the Western Mediterranean depends on the maintenance of base at Gibraltar and this is unlikely. Alternatively the Canary Islands and the Azores and Cape Verde Islands. See Dominions Office cable Z.178. 
With regard to the Canary Islands commitments too heavy and unlikely to be undertaken. The Azores and the Cape Verde Islands, while useful, have not the necessary facilities for bases. This fact plus the limited number of ports into which (ships]  could be taken for examination probably means blockade would have to be indirect down the following lines:-
(1) Control at source.
(2) Restriction of insurance.
(3) Refusal of bunker facilities.
(4) Declaration of prohibited area in which unrestricted sinkings would be declared.
The latter point under consideration of the War Cabinet but no decision yet.
Continuance of naval forces in the Eastern Mediterranean involves not only questions of blockade but the maintenance of our forces in Egypt and Palestine. If air superiority achieved by the enemy this would probably involve withdrawal of our naval forces. In this event the canal would be blocked and naval forces based at Aden.
General conclusion that even if naval forces withdrawn from the Eastern Mediterranean, effective blockade could be continued.
The position created by withdrawal of forces from Egypt and Palestine dealt with later.
With regard to (b) this involves both necessary supply aircraft and trained personnel but former more important because training depends upon availability of suitable training machines. For production we are dependent upon this country, United States, Canada and Australia. In the United Kingdom the present increase of production may represent the peak point as there will probably be a falling off in the future due to interference with hours of work and destruction of factories by enemy air action equal to any further increased effort.
If air superiority to be obtained production in Canada and Australia must be brought to maximum point and United States must be persuaded to make an 'all-in' effort on a national basis not merely speed up her industrial machine on existing lines. Efforts to this end are now being pursu[ed]  with United States and definite steps with regard to Canada have been taken. In this speeding up all ordinary financial considerations must be ignored as must be the question of dollar resources.
With regard to (c) notwithstanding (that] the necessity for vast armies in European theatre has disappeared, we shall require all the men we can train and equip (1) for defence of the United Kingdom (2) to meet the dangers as they develop to our vital interests abroad particularly in (a) Africa (b) The Middle East and (c) The Far East (3) for sporadic but increasing harassment of enemy along his two thousand miles of European coastline.
In the event of its being necessary to withdraw our forces from Egypt and Palestine, the withdrawal would be on Iraq and Kenya. In such event we would have to base great forces on Iraq to protect oil supplies of Iraq and Iran and large forces would be required to prevent African continent being overrun.
The provision of these forces does not depend upon man power but upon supply of equipment.
For provision of this the same considerations apply as in regard to the sale of aeroplanes, plus the fact that Australia, India and South Africa can make a large contribution. With regard to this I am cabling you separately. 
On the question of supplies of aeroplanes and equipment I have had most useful conversations down the above lines with Beaverbrook and Morrison , both of whom are alive to the position.
As a result of our discussion on the Mediterranean and Middle East, immediate consideration is being given to the necessity of crippling Italy's naval power in the Mediterranean and strengthening coast air force in Egypt.
With regard to Far East I took the line that Australia could not be asked to send forces to Malaya without a much clearer appreciation of the whole position.
We had a considerable discussion but as it was quite inconclusive and a new appreciation is being prepared by the Chiefs of Staff on the Far East we postponed further consideration pending completion of such report. I am also hopeful that as a result of discussions an appreciation will now be prepared on the widest lines of strategy and policy for the conduct of the war.