Your cablegram 316 of 20th August. 
1. The Government notes that, in regard to its acceptance of initial responsibility for Borneo and territories to the East thereof, it is the intention of the United Kingdom Government to make available, as soon as possible, British and Dutch Forces to relieve Australian Forces in territories other than Papua and the Australian Mandated Territories for which we will remain responsible throughout.
2. Further consideration has been given to the division of responsibility within the Southwest Pacific Area between the United Kingdom and Commonwealth Governments in the light of discussions between Australian service representatives and the South East Asia Command Mission. The following arrangements, which have been agreed upon by the Service representatives, are concurred in by the Commonwealth Government:-
(a) South East Asia Command to take over responsibility for the Netherlands East Indies in three phases, except as stated below:
Phase 1: Australia will initially be responsible for Borneo and the Islands to the East thereof. South East Asia Command will be responsible for the re-occupation of Java, Bali and Lombok.
The assumption of initial responsibility by Australia does not connote action to occupy in Phases 1 and 2, all of the Islands within its sphere. In fact, there will be a gap consisting of Celebes (except Pinrang), Halmaheras (except Morotai), Dutch New Guinea and the Lesser Sundas, excluding Timor, in which neither South East Asia Command nor the Australian Command have sufficient resources to accept local surrenders initially. These areas can only be covered in the first instance by the general surrender at Singapore of Field Marshal Terauchi  or by local surrender of subordinate controlling headquarters in these occupied territories. In areas where Australian responsibility involves the acceptance of the surrender of Japanese Forces and the re- occupation of territories, this will be undertaken in stages.
Phase 2: South East Asia Command will take over up to the line Balabac Straits, Southeast to include South East Asia Command, the Halmaheras group, exclusive of Morotai, then Southwestward through the Manipa Strait West of Ceram and Amboina, continuing Southwest through the Ombai Strait North of Timor.
The target date for the completion of Phase 2 is the end of October, 1945.
Phase 3: South East Asia Command will become responsible for the whole of the Netherlands East Indies (including Dutch New Guinea) less the Island of Timor, the future responsibility of which will be the subject of later negotiation between the respective Governments.
(b) The progressive assumption of responsibility by South East Asia Command will be determined by the resources available. The detailed phasing is a matter of planning between the staffs of Australian Command and South East Asia Command. In principle, South East Asia Command accepts that it will use every endeavour to take over the area as rapidly as possible.
(c) Subject to detailed adjustment as may be required, the Command of Dutch Forces which may hereafter come into the theatre, should, in general, rest with South East Asia Command; Dutch Forces now under Australian Command will so remain until the area in which they are employed is handed over to South East Asia Command, again subject to detailed adjustment as necessary.
(d) Such responsibility as is accepted during the military phase for Civil Affairs administration will pass simultaneously with Command in any area. In the organisation of economic measures in South East Asia Area, military responsibility for the restoration of economic life has been defined as being restricted to action necessary to prevent disease and unrest, during the initial period of military administration.
3. The Government invites attention to the following:
Arrangements are being made for acceptance of surrender of Japanese Forces in Portuguese and Dutch Timor by Australian Forces. This is referred to in the Government's cablegram No. 356 of 28th August, 1945. 
The general intention is not to extend the present area of responsibility in Borneo, except for special reasons such as the relief of prisoners of war. The Government desires that the relief of Australian troops in this area should be completed by the end of October, in view of the Programme which it has laid down for the demobilisation of the Services. It is also desired that responsibility for Civil Affairs be taken over by British and Dutch authorities with the least avoidable delay, and not later than the end of October.
(c) Dutch New Guinea.
Australia has a special interest in Hollandia and Biak as Air Force staging areas and we are prepared to maintain initial control in Dutch New Guinea, although it will, for all practical purposes, be confined to these staging areas. This is on the understanding that the Dutch will remain responsible for Civil Affairs administration, that the acceptance of the surrender of Japanese troops in Dutch New Guinea will have a low priority and that the general occupation of the territory will be left until British or Dutch troops are available.
(d) Celebes and Halmaheras.
Although, in Phase 1, it is proposed that Australia should accept initial responsibility for the Celebes and the Halmaheras, without, however, taking occupying action in these areas, the Government agrees with the recommendation of its Service Advisers that, as the Headquarters, 2nd Japanese Army, are at Pimang in the Celebes, Australian troops should accept the surrender of this Headquarters and that, for this purpose, a limited force be placed in Pinrang.
Some Allied prisoners of war are believed to be in the Macassar area, and only a minor operation would be necessary for the recovery of these prisoners. If practicable, Australian Forces will assist in this operation.
Morotai, in the Halmaheras group, will remain within the area of Australian responsibility until the completion of Phase 2, as a large Australian staging base is located on this Island.
(e) Nauru and Ocean Islands.
As advised in cablegram 246 , the Government will make available an Australian Force to accept the surrender of the Japanese forces at Nauru and Ocean Islands, and to reoccupy these Islands.
(f) Civil Affairs Administration.
The general principle adopted by the Government in regard to Civil Affairs is that, except in Papua and Australian Mandated Territories, Australia shall refrain from any extension of its present responsibilities for civil affairs in re-occupied territories. Such responsibility as is accepted initially during the military phase will pass to the South East Asia Command simultaneously with the relief of the Australian Command in the respective areas. We look to Governments having sovereign rights in these areas to take over full responsibility for them after the initial period.
On the basis that, during the initial period of military administration, military responsibility for the restoration of economic life in the re-occupied territories is broadly restricted to action necessary to prevent disease and unrest, the Government will accept responsibility for civil affairs administration to this limited extent.
It is understood that it is the intention that civil governments shall assume responsibility for economic restoration as soon as it is possible, and that close co-operation is being maintained between Military and Civil Authorities with that end in view.
(g) Responsibility of Australian Command on Completion of Phase 3.
On completion of Phase 3, the date of which is indefinite, the responsibility of the Australian Command will be limited to Papua and the Australian Mandated Territories. As indicated in paragraph 2 (a), the future responsibility of Timor will be the subject of later negotiations.
4. It is noted that consideration is being given to the Commonwealth Government's proposals for participation of Australian Forces in the occupation of Japan. The Government assumes that in your consideration of this matter, an examination will also be made of the aspect of the provision of maintenance requirements. The Australian forces in the South West Pacific Area have so far relied to a large extent on the United States Forces for assistance in meeting maintenance requirements such as the provision of shipping, base installations, repair facilities, common technical supplies and stores and fuel and lubricants. The Government looks to a continuance of this arrangement. It is also advised that the shipping requirements stated in paragraph 5 of our cablegram No. 240 of 17th August  do not include provision for the Australian Force for Japan. Details will be furnished when strength of forces is known definitely.