SECRE
ETARY
OF
STATE
Page No.2 of 4 Pages
TOP SECRET
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had made clear that he would not worry too much so long as there was one member of the British Services on the Malaysian mainland'; and he and Tun Razak had accepted very calmly the prospect of the rundown of local British employees over the next few years.
Mr. Lee Kuan Yew was clearly taken by surprise; he had evidently expected a very different reaction from the Malaysian Government. Nevertheless, he acknowledged the news with some relief and said, in particular, that he was relieved to hear about the Malaysian preference for maritime/air forces in 1970/71. lle accepted (though with some reluctance) Mr. Healey's view that the Tunku and Malaysian Ministers had thought about the problem and come to the same conclusions as Lee Kuan Yew had done. Mr. Lee Kuan Yew did, however, draw attention to the Malaysian edition of the Straits Times, in which Tun Razak was quoted as making some rather ambiguous remarks at his Press Conference about the Malaysian interest in the future of British bases in Singapore. Mr. Healey took note men- tioning that Tun Razak's line with the Press had been generally helpful.
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Mr. Healey went on to say that he had had an opportunity of talking to the representatives of Australia and New Zealand in both Singapore and Kuala Lumpur, and had emphasised the need to play in a low key the potential implications of Britain's policy thinking. lle said that he thought that it was possible that the Malaysians hoped to persuade Australia and New Zealand to go some way to fill whatever gap was created by the withdrawal of the British. In answer to questions from Mr. Lee Kuan Yew, he summarised the next steps as he saw them:
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As to the next 12 months, firm proposals for the reduction of British forces, and of those working with them, were emerging as a result of discussions with the military authorities on the spot. When the British proposals had been worked out in detail, there would be discussions about redundancies with the Singapore authorities. These reductions which would be on top of whatever planned reductions had already been announced and the subject of discussion with the Singapore side would be likely to start about October, and to take place between then and April 1968 (though their phasing would be one of the matters to be discussed). At a very rough guess, the total numbers of local employees involved over this period might be something over 2,500. Mr. Healey emphasised that the
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/military