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Mr Thomson

cc Sir G Arthur

Mr Short, PUSD

Lord N Gordon Lennox, NAD Mr Goodison, SEED

Mr McLaren, WOD

Mr Stuart, HKIOD

Mr Kerr

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Mr. Chalmers, SAD Mr Ewans, EAD

Mr Lucas, MED

Mr Barrett, SWED

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Mr Preston, Caribbean Dept. Mr Carless, LAD

DEFENCE REVIEW: CYPRUS AND CONSULTATION WITH THE AMERICANS

1. You will wish to see Mr Short's letter to Mr Howard Smith below about the report of the Working Party on Cyprus. This will be taken at a meeting of the Defence Review Steering Committee on Friday. There is no other item on the agenda.

2. Sir J Hunt will probably suggest that the report should be sent by the Steering Committee to Ministers (who were promised a further paper on Cyprus in the OPD Committee meeting last week). A brief is being prepared for the PUS in conjunction with PUSD and will be submitted through you and Sir G Arthur. One point which will be considered is the form and content of the further message about Cyprus which, subject to Ministers' views, will need to be sent to the Americans about our intentions as regards arrangements and force levels in Cyprus. Ministers will

presumably, for example, wish to remind Dr Kissinger and Dr Schlesinger that our preferred option remains withdrawal from Cyprus when the political situation permits.

3. The question also arises whether there is anything further we need say to the Americans, before publication of the White Paper, to complete our bi-lateral consultations with them about the Defence Review in general. We of course replied in writing, just before the Prime Minister's and Secretary of State's visit to Washington, to the Americans' detailed written comments on our Defence Review proposals, and preliminary MOD/WOD thoughts are that we do not need to let the Americans know in advance how we intend to reply to NATO's comments; it should be enough to give them (and the Germans) a copy of our reply at the same time as it goes to the Secretary-General.

4. However, it could be desirable to say something more to the Americans about, e.g. their suggestion for more collaboration over R & D, on which we promised them further comment "before long" (MOD are thinking about this), and their interest in facilities in Singapore described in FCO tel No 89 to Singapore (SWPD are preparing a passage on this for the PUS's brief).

There could

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