We are receiving reports from Java that the Dutch are preparing to launch another police action against Republican territory. These are supported by persistent Dutch accusations of Republican breaches of the truce agreement, coupled with the obvious impatience of Dutch military leaders to settle the dispute by force rather than by negotiation. British sources confirm that the Dutch are planning along these lines.
2. I think we should immediately discuss with both the United States and United Kingdom authorities what action can be taken to avoid this danger, and also what our attitude would be if police action were to be commenced.
3. You will immediately see the situation which might develop. The Indonesian dispute is before the Security Council under Chapter 7 of the Charter  dealing with threats to the peace, and the Security Council acting under this Chapter has ordered a 'cease fire'.  In the event of further aggression, the Security Council would have no option but to take the next step in its power and call upon member nations to enforce the decision by one or more of the measures provided, that is, the complete or partial interruption of economic relations, communications and diplomatic relations. We have been informed that the U.S. is not prepared to protect the Netherlands further if the matter is resubmitted to the Security Council. 
4. Even though no enforcement action were taken, or even though it were vetoed, it would not be possible to avoid at leas[t] discussion of it, including discussion as to whether enforcement action should be taken against the Netherlands or only the NEI.
This will place 'Western Union'  countries in a most awkward position and would play very much into the hands of those who would like to see a difference of opinion in that group.
5. Because of local public opinion, and because also of our position in S.E. Asia generally, it would be most difficult for this Government to withdraw from the stand it has taken and to take no action in the event of further Dutch aggression. I think we would have to immediately raise the matter in the Security Council, pointing out that the truce had been broken and asking for further action under Chapter 7.
6. it is the general opinion amongst British and American observers, as well as our own, that more concerted U.K.-U.S.
pressure on the Dutch authorities at an earlier stage to accept Cochran proposals  or something like it would have been successful. They have held off because of the position of the Netherlands in Western Union. Now, however, the Dutch, confident of retaining that support, are prepared to take action which will do great damage to co-operation amongst Western Powers. In these circumstances I feel that the Foreign Secretary and the Secretary of State  should be prepared to make a joint approach to the Dutch, informing them if they do take such action they cannot depend upon the support of the United Kingdom or the U.S. in the Security Council. I think, moreover, that they should be prepared to persuade the French to make a similar approach to the Dutch, as the Dutch, no doubt, count upon the exercise of a French veto.
7. Cochran's proposals are regarded by his Government as being reasonable as the basis of a fair settlement, but apparently the Dutch do not regard them as a basis even for, negotiation and are meanwhile charging the Republic with breaches of the truce and insisting that these should stop before there is any negotiation.
Meantime, they are maintaining the blockade against the Republic, which is having severe effects on the standard of living of the Republican peoples and making more and more difficult the control of extremist groups. The outbreak of hostilities in Indonesia will have most serious effects throughout S.E. Asia and will call in the direct or indirect intervention of parties which we, the United Kingdom, and the U.S. have been endeavouring to exclude from S.E. Asia.
8. I should be glad if you would take this matter up with the Foreign Secretary and the Secretary of State as soon as is convenient and advise me of their attitude, as we might have any day to make up our minds quickly as to what we should do.