Singapore, 26 June 1963
354. Secret
Malaysia
I had [a] brief talk with Prime Minister last night before he left for London.1
2. Lee said he really wanted Malaysia but it had to be on a sound footing as far as Singapore was concerned. Malaysia was still essential and logical for both Federation and Singapore.
3. Lee said jocularly to ‘tell Mr. Menzies that if he wants Australian forces to continue to be able to use the Singapore bases, then we had better do what we could to see that London talks are successful’. (Lee thinks we have considerable influence on policy-making in Kuala Lumpur and that this has not helped Singapore much in the past. Remark probably also implies threat which contains element of bluff that if Singapore’s position is not met, he will have to revert to campaign for independence for Singapore which, he claims, would mean elimination of bases in relatively near future.)
4. Lee also said the Tunku did not like ‘sailing in troubled waters’ and he thought that he would go to London once the atmosphere calmed down there.2
5. I touched on possibility of compromise in London on lines suggested in paragraph 6 of our cable 350 to Canberra.3 Lee would not be drawn, simply saying ‘we have thought of that one too’.
6. Lee reiterated publicly at airport Singapore’s position on both Common Market and grant to Borneo territories, but added he was prepared to ‘be persuaded or to persuade’ in the interests of logical just solution.
[NAA: A1838, TS696/17/1 part 4]
1 Sandys had invited Lee to London in order to settle the outstanding financial issues so that a final agreement on Malaysia could be formulated.
2 At this stage of the negotiations, Razak, with Tan Siew Sin, represented the Tunku, who did not arrive in London until 6 July (see editorial note, Final Agreements on Malaysia ).
3 24 June. In paragraph 6, Singapore reported that domestic political opposition left Lee ‘little room for concession’, should he wish to compromise on the final terms of the Malaysia financial talks. In their view, the ‘most likely basis for sensible compromise’ seemed to be for the Federation to agree ‘to drop request for 50 million grant in return for Singapore’s acceptance of increase in Central Government’s share of national revenue from 39 to 40 per cent, to 42 per cent, (this increase to be effective one year after inauguration of Malaysia)’.