My telegram 22nd June No 184. 
As contemplated in Paragraph 7 of my telegram under reference we have reviewed position with His Majesty's Consul-General, Batavia (for whose comments on situation in Indonesia generally see my telegram No.140 of today ) and have given further consideration to possibilities of bringing about a settlement.
2. Position as we see it is that locally, negotiations have reached a virtual deadlock and although there are still possibilities of progress it seems clear, that unless a settlement is achieved in the near future, there is likely to be a serious deterioration in the position possibly resulting in a renew[ed] outbreak of violence on a wide scale. Effectiveness of Committee of Good Offices seems also to have been temporarily reduced by controversy o[ve]r plan drawn up by Australian and American members and by departure of United States member through ill- health. We understand that Belgian member is also anxious to leave in order to take up post as minister in Bangkok.
3. In view of Dutch elections which must be followed by passage through Netherlands Parliament of legislation requiring a two- thirds majority to permit establishment of United States of Indonesia, Dutch government are unlikely to be able to take any major decisions on Indonesian policy in the near future. As regards Security Council, [fact]  that Ukrainian and Soviet representatives will be in the chair during July and August respectively seems likely to lead to increased complications.
4. General outlook is therefore discouraging. Nevertheless we have been considering whether there is any way in which progress can be made towards a settlement. Best hope in immediate future appears to us to lie in Van Mook - Hatta exchanges. If however, they do not produce concrete results reasonably soon, it seems to us essential that Committee of Good Offices should be in position to renew its efforts. For this purpose, United States and Belgian members of standing must be available on the spot and it seems worth considering whether United States and Belgian Governments could not be brought to appoint outstanding persons if only for a limited period to join with Critchley in further effort towards a settlement. Appointment for limited period might serve to emphas[ize] desirability of reaching settlement within that time.
5. We should be glad to know views of Australian Government as to desirability of reinforcing Committee of Good Offices on lines indicated above with a view to fresh approach. As to nature of such approach it seems to us that best course might be instead of adhering to proposals put forward by Australian and American members in their present form, (these are unlikely for prestige reasons to be acceptable to the Dutch), to embody them in so far as they offer a basis for settlement in a new approach by Committee of Good Offices, in accord with a procedure to be agreed between Committee and parties to dispute. This procedure alone seems to us to offer any real chance of securing Dutch support for these proposals.
6. Analysis and suggestions set out above have also been communicated to United Kingdom Embassy, Washington and to United Kingdom delegation, New York. If latter see no objection former have been instructed to discuss matter on these lines with the state department and to report their reactions.