78 Cranborne to Commonwealth Government
Cablegram 131 LONDON, 28 April 1945, 4.40 p.m.
Your telegram 98 of 24th April. 
Possible Peace Treaty with Italy.
We are grateful for your views and agree that as soon as a basis for joint action has been established with the United States Government it will be necessary to consult the U.S.S.R., France, Greece and Yugoslavia both as to the general principle of early settlement with Italy and during negotiation of terms.
2. Final disposal of former Italian colonies must clearly await agreement as to the nature of trusteeship arrangements which will be applicable to enemy territories. Similarly some time may have to elapse before all frontiers of Italy can be finally determined.
But this need not in our view prevent preliminary examination of advantages of early peace with Italy in which she would either renounce her claims to certain areas or undertake to accept whatever arrangements might eventually be made for their disposal.
3. Our preference that the Treaty with Italy should be final rather than preliminary as proposed earlier is based on the following considerations A. Opinion in the United States adroitly worked upon by Italian- American elements in the population is disposed to favour more lenient treatment of Italy than her record in our view warrants.
The sooner final settlement with Italy can be reached the less likelihood exists that the United States Government will be deterred from supporting the type of settlement which we have in mind.
B. The danger of temporary settlement is that it may of necessity omit important questions for the solution of which time is required-for example-frontiers, colonies, disposal of fleet, etc.
Public opinion in this country might not understand further development of our policy towards Italy which brought Italians benefits of formal conclusion of peace without its attendant penalties. Moreover concessions which the United States appear to contemplate would not in our view bring more than a temporary advantage to the United Nations whereas they would make it all the more difficult eventually to impose on Italy the kind of final settlement which we have in mind. Serious damage might result to Anglo-Italian relations since Italy is almost certain to regard us rather than the United States or Soviet Governments as primarily responsible for any penalties imposed by the Peace Treaty.