Your E.47.  I have examined your proposal and fully agree with you regarding Australian security interests in settlement before situation further deteriorates. At same time judging by recent discussions regarding future use of Australian forces I am sure Cabinet would not agree to commitment of force which your proposal implies. It will be difficult to accept even proposal to leave Australians for extended period at Borneo.
Nor do I think we could offer to U.K. Government our services merely as third party as offer of mediation is not practicable without implied responsibility for enforcing conditions of mediation and for policing agreements which might be made. In fact U.K. would probably request us to assume some such responsibility.
We have so far refrained from making any statements except one by Makin  in reply to Menzies stating that absence of a statement did not mean lack of attention to problem. This has proved a wise course and I do not think the present is the time for either a statement or an offer of mediation.
I am keeping in fairly constant touch with Mountbatten directly and indirectly and will watch developments from point of view of our long-term security interests and possible assistance as third party. But my view is present is not the time for initiative by us.