My immediately following telegram gives background of recent negotiations between Republic and Dutch.
2. The situation at the moment is more critical than any past period, and, moreover, could be more embarrassing to the Australian Government than any past stage if not carefully handled (see paragraph 6 below).
3. My own view would be that recent events give an opportunity to demonstrate to the Dutch authorities that our objectives from the very outset have been compatible with their own interests. It was because we feared the type of development which is now becoming apparent throughout South-East Asia that we are anxious to prevent an Eastern power raising the matter in the Security Council and championing the cause of the Republic. We have deliberately aimed at an early settlement on reasonable terms which would have preserved all Dutch vital interests in the area. Unfortunately, our motives have not always been fully understood (perhaps largely because of unfortunate representation at this end), delays have occurred in reaching a settlement, and now the Dutch are faced with the strong possibility of a hostile left-wing government in the Republic who will ultimately draw to them all the native peoples and present the Dutch with a physically and financially impossible task of suppression.
4. It would seem to us from here that The Hague authorities, and particularly the new Government, have some appreciation of this broader picture. Bevin presented it to them some weeks ago.  We have been encouraged by the reports from Officer of Hague intentions and hopes, and we have always placed great reliance on the better judgment of The Hague authorities prevailing.
5. The reports from Batavia, however, have just been the opposite and even certain Dutch representatives in Australia are prepared to admit that in Batavia there are a number, particularly the military, who have been waiting for the situation which will occur as a result of delay in negotiations, that is the development of a Communist Government, which would justify further military action.
6. In this connection Teppema saw me yesterday to inform me of recent political developments in the Republican Government, and he was obviously pleased rather than distressed at the prospects.  His approach to me was, by implication, a first step in a challenge to the Australian Government to actively assist the Dutch in quelling Communist risings as the Government has done in Malaya. I reminded him that for many months we have been warning him and his Government of these developments, that it was to prevent them that we had interested ourselves in the matter, and that the responsibility very largely rested on the Dutch and that little assistance could be expected from Australia if the Dutch, even at this stage, made no attempt to retrieve the position but were deliberately relying on force of arms as a solution. Teppema, however, was obviously acting without instructions or, alternatively, on information from Batavia and not from The Hague.
He appeared to be somewhat impressed by the arguments put forward, and was particularly impressed when Australian general interest in European developments was explained to him and the implications of the recent United Kingdom gift from the point of view of European countries. 
7. In this background, it would seem to me that the way is open for a frank and friendly approach to the Dutch, offering our good offices with the moderates in the Republic to come to an immediate settlement on reasonable terms, including a definite date for the establishment of full sovereignty and the exercise of real power meanwhile by a provisional elected government. If, however, there is no spirit of give and take in the interests of immediate settlement, and there is delay on details, Australia's influence on the Republic will be negligible, and the Republic will look to other countries for support in a long-term campaign against Dutch interests in Indonesia and Western influences generally in South- East Asia. Dutch future interests in many respects lie in Australia's influence on the Republic. We are losing that influence because of delays in settlement. See Critchley's telegrams. 
8. We have been encouraged by The Hague's decision to send De Ranitz to the Netherlands, as he has always endeavoured to understand our point of view and has always acted on the assumption, despite differences of point of view, that our fundamental relations with the Netherlands are those of two friendly nations and that, therefore, there must be good reasons for our policy.
9. On the whole question of Indonesia and the related problems, we hope, in future, for much closer relations with The Hague authorities and the Government of the Netherlands, particularly as the developments of South-East Asia are related financially and politically to European problems in which we have a strong interest. If the Netherlands Government felt disposed to direct their representatives at Batavia to reach a firm settlement which we could reasonably support, we would play our part, not only in seeing that it was accepted, but that it was also implemented.
10. You should know that Australian press opinion has undergone a change recently. The ridiculous behaviour of the Dutch regarding the Indonesian party  lost them many friends, including members of Dutch-Australian Association, and the press found that the local diplomatic community was, in many cases, antagonised by Teppema's pressure on them. For the first time, the press have run favourable articles, and recently both the Melbourne Herald and the Telegraph published a feature article very much in favour of Critchley, his objectivity, and reasoned approach.  He was featured as one of the Minister's special officers, with the direct implication, therefore, that the policy being pursued was objective and aiming to be reconstructive. Moreover, there is an absence of criticism of the Government on matters related to Indonesia. An approach by you to the Dutch, therefore, in the above objective way, while, at the same time, maintaining our positions and never at any stage doing anything which would in the eyes of Indonesia and South-East Asia, be letting them down, would be well received.
11. A second local point you might have in mind [is th]at Elliott and Healey have approached the Prime Minister with regard to shipping, and are inclined to call on the ban again because of reports from Indonesia of even more repressive measures and an even tighter blockade.  The Prime Minister has informed them that you are visiting Holland, and hope to have discussions on this and related matters, and there will be no action by the Waterside Workers until the Prime Minister communicates again with Elliott and Healey. We have already supplies which Dutch and Republicans have asked for and arrangements made for scholarships, and we are ready almost immediately to send a full technical library to Batavia and the Republic amongst other countries in South-East Asia. It would be of tremendous value, and in a sense an answer which the Prime Minister could give to the Waterside Workers, if you could get an assurance that the supplies consigned to the Republic will be transferred to them on the assurance of the Australian Government that they contain no weapons of war or anything which could not be legitimately classed as relief supplies. Healey has asked the Australian Government to try an experimental shipload of its own goods to see whether they get through the blockade, and to test the statements made by the Dutch. This proposition, of course, has not been accepted, but the free flow of relief supplies might be the means of establishing normal commercial relations between the Republic and the Dutch and the rest of the world.