IMPORTANT

The Indian Government's concern over the deteriorating position in
Indonesia has been formally conveyed to me by the Foreign
Secretary (K.P.S. Menon). Referring to the breakdown in
negotiations, he expressed the hope that Australia will persist in
her efforts to bring about settlement. He has no knowledge of what
the Australian-American proposals [1] involved other than an
Indonesian release of 19th June. According to this the plan in
essence provided for the election of a constituent assembly, which
would also be a provisional legislature, and would form an interim
government to whom the Netherlands and the Republic would transfer
full power the exercise of which would be subject only to a
limited veto on the part of the Governor-General.

The Indian Government considers that the proposals, if correctly
reported, provide a very reasonable basis for settlement; they are
regarded as constructive and satisfactory erring, if at all, on
the side of being conservative.

The Indian Government would appreciate your official version of
the proposals together with any observations you may feel able to
offer with respect to the present situation.

A subsequent telegram covers other subjects dealt with in the
interview. [2]