Reference Commonwealth Relations telegram D.642 [1] and your 190
[2] and 191. [3]

The United Kingdom proposal for an arbitral solution appears to me
to offer the best chance of success. As I see it the vital issue
at the moment is that of restoring peace and this should outweigh
even important questions of national prestige. If the United
Kingdom proposal could be adopted at once this might head off
action by the Security Council which most regrettably can only
result in the introduction of extraneous international issues.

Should Security Council intervention lead to military sanctions we
all risk becoming embroiled and one cannot view with anything but
the utmost regret the opportunity this would give to U.S.S.R. to
interest itself directly in the affairs of this area.

The United Kingdom and the United States can if they feel so
disposed, exert strong influence with both parties and at the
present stage they seem more likely than Australia notwithstanding
its disinterestedness and its high standing to succeed in
moderating the disastrous attitude of the Dutch.

I fully appreciate the vital interest of Australia and of New
Zealand in the settlement of such an inflammatory dispute as this
in the Pacific area and I am fully prepared to urge that Australia
should be directly associated in any efforts of mediation which
the United Kingdom and United States might be able to undertake
but I would ask that the most serious consideration should be
given to the possible consequences which might conceivably arise
from your Government's refusal to accept the possibility of United
States - United Kingdom arbitration and I most earnestly trust
that any differences on this issue should not be allowed to hold
up any such attempt.

The raising of this dispute in the Security Council may be
inevitable and I do not suggest that Australia should abrogate its
claim to raise the matter but I do consider that the alternative
of mediation or arbitration should be attempted first.