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The attitude of Spain at present causes no anxiety

but H.H. Ambassador at Lisbon points out that if we decide

to bring pressure on Portugal to alter her neutrality, an

internal revolution may be the consequences, and this might

lead to the armed intervention of General Franco.

It

ould be beyond our capacity to give Portugal the necessary

support to keep out the Spaniards either in point of time

or of strength. The tables might in fact be turned

completely, since we might find a Spanish controlled

Portugal treating Germany with benevolence to our serious strategical disadvantage.

24.

Furthermore, if Portugal were at war ith Germany, it is doubtful whether the present protection of the British cable stations in the Islands against possible German raids would be adequate, particularly if we were also using the Islands as a base for flying boats.

Present Allied Strategic Requirements.

25.

While Portugal is neutral we cannot, of course, make use of her bases for our own purposes, and it remains to decide whether our actual need of them, at the present time, would justify the defence commitments in which we

might become involved.

26. From the point of view of protecting sea-borne

trade, it cannot be said that we are now suffering serious disadvantage through inability to use the Portuguese bases.

It appears unlikely that we should require to make more than

occasional use of them, although there might at times be

advantage in operating flying boats from the Azores or from

the coast of Portugal. This is not, however, a vital

strategic necessity, nor can the transit of the flying boats

now building in the U.3.1. be regarded as an overriding

consideration.

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