In July 1966, the Defence Review Re-deployment Committee proposed making savings in overseas expenditure of at least £100 million during 1967–68. The Government decided to accelerate the rundown programme and cut down further the military forces in Malta and Cyprus. Malta was reduced to a staging post with a reconnaissance squadron.
The Maltese Government reacted very strongly to the proposals. In 1964, the Colonial Secretary Mr Duncan Sandys had given an assurance that there would be no further reduction for ten years. The Commonwealth Secretary stated that the Maltese would not acquiesce with the reduction on the scale and timetable the British had envisaged. He warned that if the UK
carried out reductions in troop numbers against their wishes, resentment might be so strong as to turn Malta against the West with serious consequences for the North Atlantic Treaty Organization and for the strategic position in the Mediterranean.1
Eventually an agreement was reached in London in Feb 1967, whereby the withdrawal of the two battalions from Malta was deferred by two years, the RMA serving in Germany was retained for a further period, and the withdrawal of one Canberra Squadron was deferred for 6 months and RN frigates for 12 months. The retention of two army battalions in Malta eased the accommodation shortage in the UK.