As you will be aware we have decided to send further reinforcements to Malaya and have recently announced decision to send second Guards Brigade. Following for your top secret information are main considerations which led us to take this step.
2. The Malay Communist Party is endeavouring to establish a Communist State in Malaya. The first stage in their plan is to dislocate the economic life of the country. In order to achieve this they have engaged in wholesale campaign of murder, wounding and kidnapping directed primarily against law-abiding Chinese who co-operate with administration. Actual or potential informers and Kuomintang sympathisers are particular objects of attack. A smaller number of Europeans have been attacked and murdered, primarily those in isolated positions on plantations.
3. The instrument which the Communist Party have created to achieve their ends is made up of Chinese bandit gangs each unit numbering about 30 and totalling throughout the Federation at present some 3 to 4,000. Their full strength is not yet mobilised.
They are planning to increase to about 5,000 in the next month or six weeks.
4. This Terrorist Campaign is not genuine popular movement. But if Terrorists remain unchecked, there is a danger that they may increase number of their supporters and their hold over them.
5. All possible counter measures to restore confidence and order in Malaya are being carried out, including especially the strengthening of the Interim Security Services, particularly the Police, but these measures are bound to take time before their full effect can be felt. Meanwhile violence continues to the detriment of the morale and confidence of the civil population. It is for these reasons, therefore, that we have decided to send military reinforcements to Malaya in an endeavour to stabilise the situation until the Security Force are fully effective.
6. We are considering the further steps that will be necessary to stamp out the menace completely.