Your telegram of 26th August, No. 407. 
I have consulted the Chiefs of Staff and the following are their views:-
2. Since the despatch of the Dominions Office cablegram No. 362 of the 6th April to which you refer  the situation has altered considerably. There is no doubt that the offensive recently undertaken by the Americans in the Solomon Islands area will do much to contain the Japanese naval forces in the Pacific and will therefore reduce the likelihood of an enemy sortie in strength into the Indian Ocean. Nevertheless until operations in south-west Pacific have developed further a Japanese incursion into the Indian Ocean, even if only as a diversion, cannot be ruled out of court.
3. Our present views on the conditions in the Indian Ocean area are as follows:-
(a) The land strength in India has steadily increased but you will note that we have recently had to move one division and one armoured brigade from India to the Persia-Iraq command.
(b) The flow of shore based aircraft into the Indian Ocean area had to be held up in the Middle East when a critical situation developed there in July and it is still not possible to release more than a small proportion of them. We are therefore still short of what we consider should be the minimum shore based air force strength in the Indian Ocean theatre.
(c) Our plans for naval reinforcements of the Eastern Fleet have had to be withheld, firstly on account of the need for replenishing Malta and again for operations contemplated in the near future. The present strength of the Eastern Fleet is two modernised battleships, one aircraft carrier and a bare minimum of cruisers and destroyers. In addition there are two of the 'R' class , unmodernised and short of destroyer screen.
4. It is for the above reasons that in our view the possible transfer of British naval forces from the Indian Ocean to the Pacific is not yet opportune.
5. With the recent heavy losses sustained by the Royal Australian Navy we fully realise your anxiety in this matter but for the reasons given above no concentration of combined British and American naval forces in the South-West Pacific Area is under contemplation at present.
6. Administrative plans and preparations for an emergency move of a portion of the Eastern Fleet capital ship and carrier strength to the SouthWest Pacific Area or, in certain circumstances, temporarily to the Atlantic and Mediterranean are, however, in train, and the A.C.N.B.  is being kept informed.