My telegram 22nd June No 184. [1]

INDONESIA

As contemplated in Paragraph 7 of my telegram under reference we
have reviewed position with His Majesty's Consul-General, Batavia
(for whose comments on situation in Indonesia generally see my
telegram No.140 of today [2]) and have given further consideration
to possibilities of bringing about a settlement.

2. Position as we see it is that locally, negotiations have
reached a virtual deadlock and although there are still
possibilities of progress it seems clear, that unless a settlement
is achieved in the near future, there is likely to be a serious
deterioration in the position possibly resulting in a renew[ed]
outbreak of violence on a wide scale. Effectiveness of Committee
of Good Offices seems also to have been temporarily reduced by
controversy o[ve]r plan drawn up by Australian and American
members and by departure of United States member through ill-
health. We understand that Belgian member is also anxious to leave
in order to take up post as minister in Bangkok.

3. In view of Dutch elections which must be followed by passage
through Netherlands Parliament of legislation requiring a two-
thirds majority to permit establishment of United States of
Indonesia, Dutch government are unlikely to be able to take any
major decisions on Indonesian policy in the near future. As
regards Security Council, [fact] [3] that Ukrainian and Soviet
representatives will be in the chair during July and August
respectively seems likely to lead to increased complications.

4. General outlook is therefore discouraging. Nevertheless we have
been considering whether there is any way in which progress can be
made towards a settlement. Best hope in immediate future appears
to us to lie in Van Mook - Hatta exchanges. If however, they do
not produce concrete results reasonably soon, it seems to us
essential that Committee of Good Offices should be in position to
renew its efforts. For this purpose, United States and Belgian
members of standing must be available on the spot and it seems
worth considering whether United States and Belgian Governments
could not be brought to appoint outstanding persons if only for a
limited period to join with Critchley in further effort towards a
settlement. Appointment for limited period might serve to
emphas[ize] desirability of reaching settlement within that time.

5. We should be glad to know views of Australian Government as to
desirability of reinforcing Committee of Good Offices on lines
indicated above with a view to fresh approach. As to nature of
such approach it seems to us that best course might be instead of
adhering to proposals put forward by Australian and American
members in their present form, (these are unlikely for prestige
reasons to be acceptable to the Dutch), to embody them in so far
as they offer a basis for settlement in a new approach by
Committee of Good Offices, in accord with a procedure to be agreed
between Committee and parties to dispute. This procedure alone
seems to us to offer any real chance of securing Dutch support for
these proposals.

6. Analysis and suggestions set out above have also been
communicated to United Kingdom Embassy, Washington and to United
Kingdom delegation, New York. If latter see no objection former
have been instructed to discuss matter on these lines with the
state department and to report their reactions.