Your telegram 23 of 8th January [1], our Chiefs of Staff consider
that by the time the Portuguese troops arrive in Timor our
position at Darwin due to United States naval and air
reinforcements may be improved to such an extent that we should be
in a position to take more effective action in repelling a
Japanese attack on Timor than hitherto.

2. Therefore in view of the serious consequences which would
result due to a breach with the Portuguese, we agree with the
proposed course of action in paragraph 10 of cablegram No. 23 [2],
with the proviso that negotiation should be conducted on the basis
that-
(a) Road between Dilli and the Dutch border should be improved.

(b) Australian troops should be camped as close to Dilli as the
Portuguese will agree.