Please give the following message to the Prime Minister [1] for
his Most Secret and Personal information-
1. Following is a summary of the situation as we see it regarding
Iceland.

2. The successful establishment of a German force in Iceland would
be gravely detrimental to our economic blockade of Germany and
would also increase Germany's ability to interfere with our trade.

The establishment of a German base at Trondheim, together with the
French collapse, have materially increased the likelihood of an
early German attack on Iceland which might take the form of a
diversion in connection with an invasion of the United Kingdom or
might be undertaken as a separate operation. We could not be
certain of intercepting a German seaborne expedition from Norway
to Iceland and must therefore maintain a sufficiently large
garrison to repulse any light scale attack undertaken as a
diversion and in the event of a large scale attack to prevent the
enemy getting firmly established before reinforcements could
arrive.

3. It has therefore been decided that the garrison of Iceland
should be increased to the size of one infantry division together
with certain additional anti-aircraft and coast defence equipment.

One of the nine battalions required for this division has already
been provided by Canada and two further battalions are being
despatched from Canada on the 25th June. The remainder of this
division has been provided from the United Kingdom. Negotiations
are now in progress with the Canadian Government for the whole of
the Canadian second division to be stationed in Iceland. Should
this be agreed, the majority of the military units which have been
despatched to Iceland from this country to make the force up to
the strength of a division would probably be withdrawn and
employed in the defence of the United Kingdom. Certain
reconnaissance aircraft, a small air striking force and additional
local naval defence vessels are also being despatched to Iceland
from the United Kingdom. [2]