Via Bruce Schneier, a redacted version of the NSA’s “American Cryptology during the Cold War, (1945-1989)“ has been released thank to a request from the George Washington Universities National Security Archive project.
It includes a rather interesting section (book 1, pages 18 and 19) on how, in 1947, the UK foreign intelligence agency, SIS, decrypted some KGB messages from Canberra that turned out to include classified UK intelligence military estimates. This caused the US to break off crypto intelligence sharing with Australia putting the British in an awkward situation; as Clement Attlee put it:
The intermingling of American and British knowledge in all these fields is so great that to be certain of of denying American classified information to the Australians, we should have to deny them the greater part of our own reports. We should thus be placed in a disagreeable dilemma of having to choose between cutting of relations with the United States in defence questions or cutting off relations with Australia.
It took 5 years, the establishment of ASIO and a change in government from Chifley to Menzies before the US would reestablish full resumption of cryptologic exchanges with Australia and the author of the history concludes that this has a very bad effect on early American intelligence efforts against China.
The cause of the original leak to the KGB ? Two “leftists” in the Australian diplomatic service…