Canberra, 21 May 1963
364. Secret
Malaysia
Reference your telegram No. 286.1
We are reluctant to intervene at this stage along the lines you suggest. There are disadvantages in taking sides in the dispute between the two major elements in the new Federation. Our intervention might encourage the Malayans not to look for a solution and would create resentment in Singapore. Minister recalls that in his letter to Lee Kuan Yew after his visit2 he said he had avoided discussion on these issues. Please continue to urge the larger general interest. You might discreetly make the point that while Australia is firmly attached to the Malaysia concept we are quite concerned that a demonstrated inability to deal with such problems will weaken the confidence of other countries whose political support for Malaysia is essential.
2. We hope that the technical expertise which the British can bring to bear would lead to at least an interim solution. We would not rule out the possibility of Australia providing advice on federal state financial relationships at a future stage if required.
[NAA: A1838, 3006/4/7 part 7]
1 Document 68.
2 See footnote 1, Document 64. Letter not published.