In my telegrams particularly 18[A] of February 1st , I have given you an indication of the reasons which have led to the delay in your being more fully informed as to the agreement with regard to Pacific strategy reached at Sextant. 
In my telegrams I have refrained from going into the details of the Sextant decisions in the hope that the short official advice you have received with regard to them would be amplified. I now feel, however, that I should be more explicit as, in my view, the Prime Minister's reply to you (D.O.66 of March 11th ) is somewhat disingenuous. The Prime Minister's telegram suggests that no more than preliminary study was given at Sextant to the 'over- all plan for the defeat of Japan' but the conclusion reached was that the plan provided a basis for further investigation and preparation and in paragraph 3 he outlines two plans for the British contribution.
These two alternative plans contemplate the main British effort being based either on India or Australia and of the two alternative plans, he places the one based on India first. This, on the information available to me is not a fair presentation of the position.
As I understand it, a firm decision was reached at Sextant in favour of the broad strategic plan referred to in paragraph 1 of your telegram  of which the following is a more detailed summary.
(a) The main effort against Japan to be made in the Pacific by a combined advance through the Central Pacific and along the north coast of New Guinea towards the Formosa-Philippines area, priority being given initially to the Central Pacific.
(b) Operations in the South East Asia area to be subsidiary to the Pacific and designed to improve the air route to China and open a land route when possible.
Care to be taken not to get involved in a campaign for the recapture of the whole of Burma until the full needs of the Pacific are met.
(c) Preparations to be made for operations in the North Pacific after the defeat of Germany on the assumption that Russia will probably enter the war shortly after the defeat of Germany.
The steps contemplated to give effect to this broad strategic conception were- (1) The initial British contribution to be the despatch of a fleet to the South West Pacific.
(Note. Most of the war ships allotted for this task have now arrived in the Indian Ocean.) (2) Two infantry divisions to be moved from India to Australia this year.
(3) A further 4 divisions to be sent from the United Kingdom to Australia to arrive about eight months after Germany's defeat.
(Note. Other divisions would probably follow.) (4) 65 R.A.F. squadrons to be available in the South-West Pacific some 7 to 12 months after Germany's defeat.
(Note. This force would be additional to our own and New Zealand squadrons for which modern equipment would be supplied as necessary.) This strategic conception and these plans were approved by the Chiefs of Staff and my information is that they have remained firm in their adherence to them. The Prime Minister, however, on his return from North Africa urged their reconsideration, as indicated in my telegram 18[A].
Many conferences have been held between the Prime Minister and the Chiefs of Staff in which my information is the Chiefs of Staff have maintained their view that the Sextant strategic plan is the right one and no decision has yet been reached.
I understand the attitude of the Chiefs of Staff is that British resources are only adequate for one major effort against Japan, i.e., either with India or Australia as the main base. They admit that there are no doubt many political reasons why early independent British operations in the South East area are desirable. They maintain, however, that British forces are not adequate to undertake a major operation in this area without American assistance and that the Americans have consistently refused to contribute to that area the help which would make amphibious operations possible since to afford such help would reduce their Pacific effort.
They also argue that since British action against the Malay barrier cannot be taken until after Germany's defeat, it is likely to be too late to assist the main thrust across the Pacific.
They argue that if we are to defeat Japan at the earliest possible moment, the maximum effort the United Kingdom can afford to divert before Germany's defeat for operations against Japan should be used to support directly the American Pacific operations.
They also contend that a united effort in the Pacific is likely to enable assistance to be given to China through South East China sooner  than by operations designed to reconquer Burma and open the Burma road.
The one point of doubt with regard to Australia as the main base is the one raised in paragraph 5 of the Prime Minister's telegram, namely our base potentialities.
This point is now under urgent consideration and a party from the Admiralty under Rear-Admiral Daniel has already left the United Kingdom via America.
The main points upon which doubts have been expressed are- (a) Shortage of manpower.
(b) Shortage of storage accommodation partly because of United States of America occupancy.
(c) Shortage of shore naval facilities particularly if the Americans remove what they need for bases when they move North from the Australian mainland.
(d) The capacity of Australian ports and railway communications to meet the requirements of the incoming forces after allowing for Australian export programmes and vital internal requirements.
In view of the statement in the Prime Minister's telegram that the alternative of a strategy based on India or Australia is now under examination I suggest you should consider the desirability of sending a telegram setting out the Australian view as to the broad strategy which should be followed in an over-all plan for the defeat of Japan. in such telegram it would be desirable that you should deal with the doubts I have indicated above as to the suitability of Australia as a main base.
I have sent you the above as I feel it is urgently necessary you should be advised as to the background of telegram 66. The situation here is very delicate and may even cause serious difficulties between the Prime Minister and the Chiefs of Staff which would be catastrophic at the present stage of operations in Europe.
My own view is that the arguments in favour of the broader strategy agreed at Cairo are so strong that it will eventually be adopted.
I know you will realise the necessity for the utmost secrecy being observed with regard to this telegram.