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In the 1950s and early 1960s the Indonesian–Dutch dispute over the sovereignty of West New Guinea was of great concern to the Australian government. Canberra pursued policies to deny Indonesia control of the territory and encourage the Netherlands to retain its presence there. However, in mid-January 1962, the Australian Cabinet realised the disadvantages of continuing to resist Indonesian claims and gave de facto approval for annexation by Indonesia. This paper examines the reasons for Canberra's policy reversal, arguing that the primary factor was Australia's desire to avoid an Indonesian–Dutch war and prevent the possible Communisation of Indonesia. [ABSTRACT FROM AUTHOR]