256 Department of External Affairs to Ballard

Many thanks your 267 [1] which was most useful. My immediately following telegram [2] contains text of statement [3] made by the Prime Minister. We are concerned at the way in which the situation is drifting and particularly the complete absence of acknowledgment from the Indonesians of the actions of this Government. This statement is an attempt to divert attention from the eleven-power proposal [4], which has all kinds of political complications, and to focus attention on what would appear to us to be a practicable proposition which should be acceptable to both parties. You should indicate to Dutch authorities that they should either accept a proposition such as we have outlined or they will be faced with a choice of accepting the Indonesian proposition of a number of parties or a return of the matter to the Security Council. They may not feel favourably disposed towards Australia, but they may be inclined to accept the lesser of the two evils.