Your 159.  Commonwealth Government concurs generally with lines of solution proposed by Sir R. Campbell  and hopes the matter will be taken up immediately with Portuguese Government. An early settlement would contribute substantially to success of forthcoming staff conversations.
With regard to paragraph 5 of telegram under reference, we understand the Japanese Consul has a staff including servants of three. It should be made clear to Portuguese Government that we require equality of treatment as between Japanese Consul and Ross, that is to say, we must reserve the right either to give Ross an equivalent staff (at present he has none at all) or to require the removal of the whole of the Japanese Consul's staff.
An alternative which we consider preferable would be to arrange for removal of both Ross and Japanese Consul. It is conceivable that if the military position is restored to our satisfaction as result of staff discussions, advantages of having Ross on the spot would be outweighed by risk of transmission of security intelligence to Tokyo by Japanese Consul (see paragraph 2 of my telegram 79 ). From our point of view situation in Portuguese Timor could be kept under surveillance fairly satisfactorily from Koepang, provided we were assured of removal from the colony of present hostile elements. The authority of Consul Ross will be largely nullified by the withdrawal to which we agreed at your special request and on that account Ross himself would favour this alternative.
It should be intimated to Portuguese Government that we expect them in return for what we have done to accord us choice of more expedient course.
Further, Portuguese Government should be asked to give assurance, as one condition of agreement, that after withdrawal of Allied forces there will be no discrimination or hostile action against those Portuguese in the colony who have shown sympathy with Allies.
As a general safeguarding provision, Commonwealth Government finally considers it necessary to emphasise the over-riding responsibility of Wavell for military position in Portuguese Timor. For that reason wide discretion should be committed to Wavell to set aside any arrangement come to if military necessity arises.
As a further illustration of danger which may follow withdrawal we are informed that the Governor of Portuguese Timor  has made abnormal use of the wireless at Dilli since the Allied landing at Timor, and that the volume of traffic and variety of addresses had created the suspicion that military in addition to political intelligence was being transmitted.
Further, as these messages are routed through Macao, it was considered highly probable that the Japanese were completely informed as to our present strength and future intentions in Timor.