Before Dalley returned to Singapore from the UK in February 1947, considerable consternation was caused in Singapore by the receipt of a rather extraordinary telegram dated 2 September 1946 from the Colonial Office addressed to Malcolm MacDonald, then Governor-General for Southeast Asia, with copies to the local Singapore and Kuala Lumpur Governors. Seemingly without any further introduction, it forwarded a proposal by Sir Percy Sillitoe, Head of MI5, the UK domestic intelligence organization, whose remit extended to British colonies, to establish a branch to be known as “Security Intelligence Far East (SIFE)” in Singapore.

Colonial Office Telegram to Malcolm MacDonald

It arrived literally out of the blue, as there had not been any prior notice of Sillitoe's proposal and, indeed, there is nothing in the records to indicate that the matter had been under consideration, although clearly it must have been discussed in the Colonial Office. It included an attachment dated 6 August 1946, some weeks before the date of the actual telegram, which was headed “Memorandum of Instruction”, covering the appointment of Lieutenant Colonel C.E. Dixon as Head of SIFE, as well as a “Charter” for SIFE indicating its proposed functions.

As the telegram explained:

This certainly seemed to be, to say the least, a rather unusual method on the part of the Colonial Office to issue “instructions” to Singapore/Malaya, especially as Dalley had been available for consultation in the UK and the MSS in Singapore would be affected. As could be expected, the telegram caused some consternation in Singapore and the matter was considered at some length at several high-level meetings.