At War Cabinet last night the rapid deterioration of the Netherlands East Indies and North Australia position caused consideration of the vital importance of Ceylon now to the Empire's war effort in general and to Australia in particular. I am sending in my following telegram  the points made by the Chiefs of Staff as to its strategic value and the present state of its defences. From this you will see that the defences of this vital point are very weak, they having been accorded a lower priority to Singapore and the Netherlands East Indies.
(2) If Ceylon is attacked in force by Japanese as they can now do from Singapore by their fleet with transports, they will either capture Ceylon or they will force the retention at Ceylon of the few British battleships in the Indian Ocean to defend it and so prevent them from escorting convoys of troops and essential materials.
(3) There are still over two Australian divisions, quite apart from the 7th Division, to be transported to Australia, and all British reinforcements to the Far East to help hold Burma and India and what can be held of Netherlands East Indies.
(4) All reinforcements to the Middle East proceed through the Indian Ocean via the Cape of Good Hope and would be in extreme jeopardy if Japan held Ceylon and her naval forces were operating from there. All of our reinforcements through Africa and the Indian Ocean of American and British aircraft would be prevented [from] coming to Australia as under these circumstances we would almost certainly lose Cocos Islands and other islands by which our cable and air communications could be maintained. All Australian- English shipping around the Cape would be in greater peril than under the present circumstances and need much more protection.
(5) The difficulties of British reinforcements arriving in Ceylon in time are all associated with the physical limitations of shipping and distance. Now that the convoy carrying the Australian 7th Division is to refuel in Colombo, which will take several days, I would submit for your serious consideration whether the Australian Government should offer to allow these Australian troops to remain in Ceylon until at least the 70th British Division could arrive and get into battle order, which would be a month or six weeks at the latest.
(6) The question of asking Australia for assistance in this way was not raised in War Cabinet in view of your decision regarding Burma, but as these troops are actually on the spot and their presence there may determine whether we hold Ceylon and so permit the use of battleships for protection of future convoys and lessen the danger of transport of our own troops as well as others, I think that the position from Australia's point of view alone, quite apart from its general effect on the whole strategy against Japan, should be carefully weighed.
(7) The Air Force at Ceylon is weak, but there are fighter reinforcements on the way in aircraft carriers which could reach Colombo during the first week in March. If decision is taken to offer to help in this way, America should be pressed to send by air every available bomber across the Atlantic and Africa to strengthen the position.
(8) If Ceylon is lost, the difficulties of an offensive against Japan and of using either India or Australia as a base for that offensive become very much greater than they otherwise would be.
(9) The offer of this assistance, even though on a temporary basis, from Australia would relieve the War Cabinet in the United Kingdom of a pressing anxiety and go far towards maintaining the united effort which so far has been achieved.