1.
GV and SV PAN British Embassy in Iceland (2 shots)
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2.
CU British Ambassador at Desk
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3.
SV Secretary
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4.
SV Ambassador McKenzie leaving Embassy to see Mr. Johannesson
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5.
GV and CU Icelandic Embassy in London (2 shots)
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6.
SV Icelandic First Secretary working in office (3 shots)
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CU Sir Alec Douglas-Home speaking:
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A TRANSCRIPT OF SIR ALEC'S COMMENTS FOLLOWS:



HOME: No I wouldn't, I would see it as an initiative to try and get negotiations going. And really, we have been trying very very hard to do this for a long time. Certainly there's no climb-down, but it could enable the Icelanders to come, in the person of the Prime Minister, and negotiate the terms of an interim settlement. What the object is, you see, to get an interim settlement between now and the Law of the Sea Conference, which begins in 1973, will take some months, and we want an agreement to cover the year also.



REPORTER: But surely what we have said all the time, up to now, is that we could not pull the Royal Navy out without a prior assurance that the would be no harassment. And now that's exactly what we have done.



HOME: Well, if the Icelanders have found, for one reason or another--which seems to them good-impossible to give. And so I think that when you are dealing in matters so important as friendship between Iceland and that as respects the NATO Alliance, I think that if you see an opening -- on which the Icelanders may be able to take advantage -- then I think there, really, the duty lies on us to take the kind of action we have. I don't call it a risk, because we have said that if any interference happens again, that of course they will go right back in -- we'll keep them just outside the fifty-miles.



BRITISH EMBASSY IN REYKJAVIK: AMBASSADOR MCKENZIE AT DESK AND LEAVING EMBASSY TO SEE THE ICELANDIC PRIME MINISTER. ICELANDIC EMBASSY IN LONDON: ICELANDIC FIRST SECRETARY IN OFFICE: SIR ALEC SPEAKING.




Initials AE/3.58


PART TELERECORDING

Script is copyright Reuters Limited. All rights reserved

Background: A threatened diplomatic rupture between Britain the Iceland was averted after a last-minute conciliatory gesture by Britain, which announced it was withdrawing its three frigate and three defence tugs from the disputed 50-mile (80 kilometre) fishing area off Iceland by Wednesday (3rd October).

But in response to Britain's suggestion that it trawlers should be left alone by Icelandic gunboats, Prime Minister Olafur Johannesson said the Icelandic fish law would continue to be enforced and if British warships returned, relations would be broken. Britain has threatened to send in its warships again if there is further harassment.

The Icelandic Government had earlier said it would break off diplomatic relations at midnight on Tuesday (2 October) if British naval ships did not leave the area.

British Ambassador in Reykjavik, John McKenzie, personally delivered the note of the new British move to Prime Minister Johannesson. In response, the Icelandic Prime Minister announced that relations would continue as before, and he had accepted an invitation from Prime Minister Edward Heath to come to London for talks.

In London, Foreign Secretary Alec Douglas-Home denied that the British move was a surrender to Icelandic threats to close down the NATO base on the island.

SYNOPSIS: New developments in the "Cod War" dispute between Britain and Iceland. Iceland had given Britain until midnight on Tuesday to withdraw its naval vessels or face the severing of diplomatic relations. At the British Embassy in Reykjavik, Ambassador John McKenzie was making last-minute plans for what might be his last day as Ambassador. In the morning he set out to deliver a note to the Icelandic Prime Minister to try and avert the breaking of relations. The note contained Britain's announcement that it would withdraw its naval vessels by Wednesday...At the Icelandic Embassy in London, as in Reykjavik, the gesture was welcomed. Although, Iceland would not agree to Britain's call that its trawlers not be harassed by Icelandic gunboats...Britain's Foreign Secretary, Alec Douglas-Home, was asked whether this was a surrender to Icelandic demands.