Press and Short wave Radio quote reports from Djokjakarta that Republican Government has indicated its preparedness to join in establishment of a democratic sovereign United States of Indonesia.
2. At the same time there are disturbing press reports from Batavia to the effect that the Netherlands Government will reserve its right to freedom of action if cease-fire agreement is not reached shortly. This seems to imply clear threat that Dutch will resort to another police action if their conditions are not met.
3. In the absence of any reports from you in the past few days we are not in a position to form an independent judgement on these reports or to follow recent trends in the negotiations. It may be that the Republican Government has decided of its own free will to yield to the pressure of events, and that in the circumstances its decision is the best one open to it. We would, however, be disturbed at any suggestion that the decision has been reached under duress, and particularly if it should be made to appear that the Committee had identified itself with a settlement reached in such fashion and embodying apparently no concessions on the part of the Dutch. I know that you yourself will have done everything practicable to protect the Republican position, but this alone will not offset possible Indonesian disillusionment with the machinery of the United Nations and also with Australia. It might become desirable for Committee to issue at an appropriate stage a public statement protesting against the behaviour of the Dutch and regretting Committee's inability to persuade them to adopt a more flexible attitude. Decision as to whether or not this will become necessary is primarily a matter for your own judgement, and we should like your views on this and on the latest developments generally.