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[Page 712]

300. Telegram From the Embassy in the United Kingdom to the Department of State1

771. Altho Fonoff highly gratified at improvement Shah’s position and downfall of Mossadeq, its attitude towards Zahedi, as revealed in recent conversations with us, reflects considerable reserve.

Fonoff attributes Mossadeq’s fall from power primarily to reaction against his steady march towards dictatorship (much of it at Shah’s expense) and to his inability deliver promised benefits under extreme nationalist program (particularly profitable exploitation oil industry).

Cautious British attitude towards Zahedi seems derive partly from distrust as result their war-time experience with him, but more importantly from fact that they regard him as opportunist. They are, for example, concerned about association Zahedi appears have formed with extreme nationalist elements such as Kashani, even though they recognize former has been forced take his support where he could find it.

British foresee period of grave difficulty ahead. As they see situation, Zahedi faces three main immediate problems: (1) Extreme nationalism; (2) disorganized administration; and (3) empty coffers. Combination these three factors creates situation capable Communist exploitation. Re first, British see no reason believe that events which led up to Mossadeq’s downfall portend any lessening of nationalist fervor in Iran and therefore look for little change in immediate future. However, second and third factors amenable to Govt action and British will be carefully watching see what corrective measures Zahedi takes.

Altho, for foregoing reasons, British still uncertain how Zahedi’s accession to power will affect their interests, they recognize that it may be better at this juncture that Prime Minister’s office be filled by someone with an anti-British reputation than by a Said.

We have impression that despite foregoing, British would like and hope be able improve their relations with new Govt. They have been encouraged, for example, by press reports of statements by Zahedi which are inferentially critical of Mossadeq’s anti-British policy. For present, however, British seem likely maintain attitude of friendly reserve and watchful waiting. We see little prospect British taking initiative renewal diplomatic relations or oil question until Zahedi’s position and policies become clearer.

[Page 713]

Similarities in foregoing to reserved British attitude towards Naguib upon his accession to power should not be overlooked.

Aldrich
  1. Source: National Archives, RG 84, London Embassy Files, classified general records, Box 34. Secret; Security Information. Drafted by Palmer and cleared by Penfield. Repeated to Tehran and to Moscow by pouch.