SECRET Summary of Events MUSCAT AND OMAN It has not been possible to begin any substantivediscussion with the Sultan. The Lord Privy Seal willprobably see him on August 3, and we mus t hope to completediscussion of both the civil development and the militaryprogramme before the Sultan leaves on about August 12. 2. The Secretary of State's paper was ready for discussionby the Cabinet on July 12 but was postponed on account ofmore urgent business. When the Cabinet took it on July 19,it was referred to a Ministerial sub-committee under thePaymaster General (the other members being from the ForeignOffice, Treasury, War Office and Colonial Office). Thesub-Committee was charged, in effect, with seeing whetherthe Hope Thomson report really represented the most economicalmeans of military re-organisation. Brigadier Hope Thomsonhimself was summoned to see Lord Mills. In the event, thesub-committee unanimously endorsed the whole of the Secretaryof State's recommendations, with various conditions, none ofwhich affect the substance of the matter. The Prime Ministerhas now approved the view of the Ministerial sub-committee,and we have been told by the Cabinet Office that we can goahead. HD 3. We have already given the Sultan informally a copyof the civil development proposals. He had already seenthe Hope Thomson report. 4. We envisage that, as soon as Mr.Heath has seen theSultan on about August 3, almost the whole of the remainingdiscussion on the subsidy can be conducted by officials:there will, however, have to be a second Ministerial meetingto discuss various relatively less important points, andpossibly also a final Ministerial meeting before the Sultangoes to set a seal on the whole operation. 5. Meanwhile, there has been an important contact withthe rebel leaders, about which I shall be submittingseparately. Briefly, a British representative has seenTalib, who made demands amounting to a restoration of theAgreement of Sib with the difference that the rebel leaderswould now recognise the Sultan's sovereignty. It is doubtfulwhether there is much prospect of eventual settlement onlines acceptable to the Sultan, to the rebels and to ourselves, but we shall of course make it clear to the Sultanduring discussions on the subsidy that diminution of therebel threat would of course lead to a review of the scaleof the subsidy itself. 6. An encouraging development has been the interceptionof an important delivery of arms designed for the rebelsin Oman. This has been due to the great improvement inour intelligence in the area. A congratulatory messagehas been sent both by the Secretary of State and by theSultan. Arabian Department,August 2, 1960 SECRET
