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and German elements, Hoare, fearing that the incident could escalate into a major anti-British demonstration, panicked and ordered the Passport Control Officer to leave the country. He also wanted the newly arrived SIS head of station, Leonard Hamilton Stokes, to go; SIS to cease all work (especially along the frontier with France where Hamilton Stokes had been setting up an early-warning network against a possible German invasion) and to burn its archives; and the Passport Control Office to be run on a skeleton basis, dealing only with legitimate passport matters. Hamilton Stokes complained to Menzies that his ‘position vis-à-vis YP [the ambassador] has become extremely difficult and embarrassing and reputation of S.I.S. has suffered’. Menzies responded with cool good sense. ‘A mere statement unsupported by reliable evidence that certain persons are working for the Passport Control Officer’, he signalled, ‘should neither perturb the Embassy nor the Spanish authorities who happen to be friendly or neutral. This is just a bluff by the Germans to get our organisation shut down and YP has fallen for it.’ Hamilton Stokes, he said, should ‘tactfully’ point out to Hoare that the men had ‘never been employed by us’ and that as the Passport Control Officer’s name was well known, he was ‘naturally a scapegoat’.

In the end the Passport Control Officer went home and Hamilton Stokes grumpily stayed on in Spain. Not only were relations with Hoare difficult, but he also had to work with the naval attaché, Captain Alan Hillgarth, an adventure novelist and personal friend of Churchill, who played a central role in collecting intelligence about enemy submarines in Spanish waters (Hoare described him as ‘a veritable sleuth’),20 and was permitted to communicate directly with Menzies in London. Over the winter of 1940-1 Hamilton Stokes endeavoured to build up his networks, exploring possibilities with, for example, opposition elements in the Confederación Nacional del Trabajo (National Labour Confederation). The potential for the public embarrassment (or worse) of the British in Spain if contacts such as these became known was another factor in Hoare’s nervousness about SIS activities. This was exacerbated by Hamilton Stokes’s liaising with the British military authorities to set up escape lines for Allied servicemen out of France. Already in August 1940 Frank Foley had raised the possibility of working with the Basques who had ‘a complete S.I.S. organisation started during the Spanish Civil War’ with excellent secret contacts and routes across the French frontier. But, as Foley delicately put it, arrangements with any such groups raised ‘certain difficulties caused by considerations of higher policy’, especially as the Basques, it seemed, in return for co-operation would demand British support for their political claims.

In the spring of 1941 SIS representation in Spain was boosted by the addition of a Section V officer, Kenneth Benton, to work under Hamilton Stokes. But, reflecting the animosity between Dansey and Valentine Vivian in London, Benton was separately instructed by the former to concentrate on developing communications across the Franco-Spanish frontier and stay-behind networks in Spain, and by the latter to devote himself to counter-espionage duties. After some irritable exchanges, Hamilton Stokes was confirmed as in overall charge of SIS activities in Spain, while Benton focused on the developing work in the territory south of Madrid, as well as counter-espionage across the whole country. Meanwhile Hillgarth (who doubled up as the SOE representative in Spain) had set up his own counter-espionage system, code-named ‘Secolo’, targeting German attempts to sabotage British ships in Spanish ports. Some positive work was at last being done. By the early summer of 1941 Hamilton Stokes had become cautiously optimistic and reported that over many months of patient and difficult work he had gradually re-established Samuel Hoare’s confidence in SIS.

But it was not to last. Two high-profile incidents disturbed the harmony, the first