The Netherlands Delegation has replied to the Committee's letter of January 3rd (see paragraphs 3 and 4, K.235 ) making the following points:
(a) A Representative of the Chief of the General Staff will confer with the Committee's military observers at 1700 hours today January 4th, to discuss preliminary plans for redeployment of military observers.
(b) Since no reply has been received from the Consular Commission as to its plan the discussions between the military representatives can only bear a provisional character and cannot prejudice the performance of the tasks entrusted to the Consular Commission.
(c) The remaining information requested in the Committee's letter of December 28th  will be furnished as soon as consultations with the Netherlands Government are concluded.
(d) 'In accordance with the first paragraph of Dr. Van Royen's statement  delivered to the Security Council on December 29th, hostilities in Java were terminated on December 31st at 2400 hours. This fact was confirmed in an order of the Commander-in- Chief which was cabled to the territorial Commanders in Java on January 2nd at 1845 hours.' 2. This reply is clearly unsatisfactory and it is evident that the Committee can make no progress against the flagrant disregard of the Security Council by the Netherlands. I therefore believe our report to the Council should throw the whole issue back; that we should show clearly that the Netherlands' intransigence, borne out by correspondence already forwarded by the Committee to the Council, makes any observation of the cease hostilities meaningless; and that in view of the restrictions which will obviously be placed on the military observers by the Dutch there will be no prospect of useful and unbiased reporting from the field.
3. Cochran will undoubtedly support a strong report in the absence of directions to the contrary from his Government. As set out in my telegram No. K.234  we are concerned that the Committee and our countries may be associated with a dishonourable settlement in Indonesia obtained by force. For this reason the Americans may wish to go further and suggest the withdrawal of the Committee.
4. The United Kingdom is anxious that the temperature in Indonesia be reduced and that efforts were not made to bring about a satisfactory settlement including a guaranteed date for transfer of sovereignty to U.S.I. This supports the Dutch line which has always been that law and order must be restored before the transfer of sovereignty can be considered. In the absence of Dutch goodwill and because of the impossibility of placing any reliance on the Netherlands' expressed desire to the transfer in question in the near future, this policy far from facilitating a settlement will be seen by the Republic and Asiatic countries as direct support for colonialism. On the contrary the main hope of a permanent settlement appears to be in making use of all possible pressures to induce the Dutch to make real concessions now.
5. The conference called by Nehru could make a positive contribution by suggesting the outline of a reasonable settlement.
Our participation in the Asian Conference, which the Republic already regards as more important than the Security Council, would be most useful for Australian prestige here. I shall endeavour to see that instructions from the few remaining Republicans free in Indonesia to their representative in India include reasonable and practical suggestions for an immediate settlement. I shall also seek to influence the reports of the Indian Consul-General  in these directions towards suggesting co-operation with us and the United States.