One of the most encouraging aspects of Peacock's visit1 was the extent to which he himself wanted to defuse Portuguese Timor and withdraw from the somewhat exposed, pro-Fretilin, pro-independence position he had adopted earlier in the year. I discussed Timor with him at some length and lthink he now accepts that an independent Timor is unlikely to be in anyone's long-term interests and that Australia's present interests are best served by a less obtrusive Australian stance and a measure of political disengagement from the issue.2
On the question of the Consulate, it seems that no news is good news. If, however, the Government does feel obliged to reopen the Consulate-and I suppose that is more or less inevitable-then might I suggest that any announcement of the reopening of the Consulate in Dili be made simultaneously with decision to open a Consulate in Indonesia and possibly in East Malaysia. This would be useful for presentational reasons. I know we have been thinking of a Consulate in Sarawak or Sabah for some time and we have also been thinking of one here in Surabaya, Bali or Medan.
[NAA: A11443,