My telegram Commonwealth of Australia 138 [1] and New Zealand 130
of 4th May.

The appreciation as to intervention of Italy has now been reviewed
as a result of recent developments and it is thought that the
first two paragraphs might now be revised to read as follows:-

'As Italy's Navy is in better condition for war than Italy's Army
or Air Force, it is probable that the Italian plan would be to use
the Navy to dispute Allied control of sea communications, while
using other arms for raids and diversions which may be on a major
scale. The probable Italian action would be either a direct attack
on the Allied interests and possessions in the Mediterranean and
Red Sea, or invasion of the Dalmatian Coast or Corfu'.

In other respects the appreciation still holds good. [2]