366 Critchley to Department of External Affairs
Cablegram K207 BATAVIA, 12 December 1948, 5.10 p.m.
The Committee today telegraphed the Security Council its report on the breakdown of direct talks between parties.  Annexed to the report are separate accounts of the breakdown received from each party (K.205 and 206), the Australia - United States plan , the United States plan , and the Dutch amendments  to the latter.
2. Combination of report and annexes, read in conjunction with introduction of fourth interim report , should make it clear to the Security Council that one party desires a settlement while the other does not, and, that failure to reach a settlement will inevitably mean most serious disorder and further hostilities in Indonesia.
3. The conclusions drawn by the Committee in the report are:-
(a) The collapse of direct talks has served to aggravate dangers in an already grave situation, reported in introduction to fourth interim report.
(b) The establishment of an Interim Federal Government, without the Republic, will contribute further to Republican opinion that the Netherlands have been proceeding unilaterally to the establishment of a United States of Indonesia on its own terms, and without the Republic, will greatly complicate a negotiated settlement of Indonesian dispute, and could create serious unrest in Indonesia.
(c) In the light of the Netherlands statements the Committee does not foresee the possibility of its bringing parties together in bona fide negotiations.
(d) The Committee envisages a further deterioration of truce and the intensification of factors already making for further economic deterioration, general unrest and social upheaval. Widespread hostilities involving conflict of organised armed groups on a large scale may be the outcome.