9. The Sub-Committee is therefore invited to consider whether

Ministers should be advised to base consultation plans on :

a.

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substantial cuts at an early date

bearing in mind the inevitable repercussions;

b. some marginal reductions, say of the order of

10%, between now and 1977 followed by

c.

a progressive rundown;

adherence to the forecast referred to in

paragraph 5 until 1 April 1977.

From the Ministry of Defence's viewpoint latitude to achieve at

least the level of cuts in b. above would be highly desirable.

Cyprus

10. In accordance with OPD's instructions, briefs are being

prepared on the basis of complete withdrawal from Cyprus,

although in parallel the implications of our having to maintain

a residual presence are being examined. In either case the

complete or partial withdrawal of our present forces will if

possible be carried out as part of a settlement on the future

political organisation of the island. We need however to

reach a view on the extent of consultations which are necessary

before our policy is announced. The US Government clearly has

a dual interest in the intelligence facilities, and the safeguard

against Russian penetration which is of concern to NATO. CENTO

also has an interest since Cyprus is the base for some of the

British forces which are declared to that organisation.

heard informally that the Shah of Iran has expressed (to a visiting delegation from RCDS) serious concern at the idea that

We have

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