Your 159. [2] Commonwealth Government concurs generally with lines
of solution proposed by Sir R. Campbell [3] and hopes the matter
will be taken up immediately with Portuguese Government. An early
settlement would contribute substantially to success of
forthcoming staff conversations.

With regard to paragraph 5 of telegram under reference, we
understand the Japanese Consul has a staff including servants of
three. It should be made clear to Portuguese Government that we
require equality of treatment as between Japanese Consul and Ross,
that is to say, we must reserve the right either to give Ross an
equivalent staff (at present he has none at all) or to require the
removal of the whole of the Japanese Consul's staff.

An alternative which we consider preferable would be to arrange
for removal of both Ross and Japanese Consul. It is conceivable
that if the military position is restored to our satisfaction as
result of staff discussions, advantages of having Ross on the spot
would be outweighed by risk of transmission of security
intelligence to Tokyo by Japanese Consul (see paragraph 2 of my
telegram 79 [4]). From our point of view situation in Portuguese
Timor could be kept under surveillance fairly satisfactorily from
Koepang, provided we were assured of removal from the colony of
present hostile elements. The authority of Consul Ross will be
largely nullified by the withdrawal to which we agreed at your
special request and on that account Ross himself would favour this
alternative.

It should be intimated to Portuguese Government that we expect
them in return for what we have done to accord us choice of more
expedient course.

Further, Portuguese Government should be asked to give assurance,
as one condition of agreement, that after withdrawal of Allied
forces there will be no discrimination or hostile action against
those Portuguese in the colony who have shown sympathy with
Allies.

As a general safeguarding provision, Commonwealth Government
finally considers it necessary to emphasise the over-riding
responsibility of Wavell for military position in Portuguese
Timor. For that reason wide discretion should be committed to
Wavell to set aside any arrangement come to if military necessity
arises.

As a further illustration of danger which may follow withdrawal we
are informed that the Governor of Portuguese Timor [5] has made
abnormal use of the wireless at Dilli since the Allied landing at
Timor, and that the volume of traffic and variety of addresses had
created the suspicion that military in addition to political
intelligence was being transmitted.

Further, as these messages are routed through Macao, it was
considered highly probable that the Japanese were completely
informed as to our present strength and future intentions in
Timor.