I made a formal call on the Netherlands Ambassador this morning and had some discussion on the N.E.I. situation. The Ambassador thought that the worst of the crisis had passed and was hopeful that the position could be stabilised on the basis of proposals which have been outlined in Dominions Office telegrams.  The next step in the Dutch view would be to call an imperial conference in the Netherlands immediately after the general elections in the early part of next year.
It is clear that the Dutch have been persuaded to go as far as they have done only with great difficulty and neither the Minister nor I think that it would be of any use to put the suggestions contained in your 329  at the present moment, although the opportunity might come for further persuasion on the Dutch later, when conditions have been restored in which the question can be looked at as a whole. The real danger at the moment is that Dutch obstinacy in refusing to talk with Soekarno may force a situation leading to civil war which will require very considerable military effort to settle.