UK National Archives, John Ennals (of SIS) to Sir George Rendel (British Ambassador to the Yugoslav Government-in-Exile), 16 March 1943. ‘On July 20th, 1942, we received a telegram from our representative in Mid East to the effect that Colonel Rakic, who was then Commander in Chief of Yugoslav Forces in the Middle East, had agreed to Naumovic being sent to Yugoslavia on our account …
With the approval of the Yugoslavs in the Middle East Naumovic was sent to Yugoslavia before the end of July, 1942. Captain Naumovic is stationed at General Mihailovic’s Headquarters in Yugoslavia, and we receive from him daily reports on enemy troop and munition transports on certain important lines of communication.’
By the beginning of 1943 SIS were becoming unhappy with the intelligence reaching Britain from SOE’s principal field officer in Yugoslavia, Colonel Bailey, who was based with General Mihailovic and the Chetniks in Serbia. They therefore decided to send a British agent, William Stuart, to work with Bailey. SOE argued that Stuart should instead be sent to join the communist Partisans in Croatia.
UK National Archives, official narrative entitled Yugoslavia, by Miss J. Dawson, pp. 17-18. This document describes a high-level meeting early in 1943 to discuss British policy towards Yugoslavia.
The SIS representative declared, ‘While Bailey gives an admirable account of what Mihailovic thinks and wants, we do not think his reports can be taken as a basis on which to frame British policy towards Yugoslavia.’
UK National Archives, SIS to SOE, 9 February 1943. ‘This is a matter of principle which was laid down in September last and Stuart was despatched from USA to Mideast for this special purpose … We share your view with regard to the importance of obtaining intelligence from Croatia … Our contacts are developing favourably there ... We do not, however, at the present time contemplate sending Stuart on such a mission … While we very keenly appreciate all the assistance given to us by Bailey and Hudson [of SOE], I think you will agree that our desire to have our own representative and communications is very natural, and most necessary in view of our hope for a much wider penetration throughout that area.’
After the Axis invasion in April 1941 they collaborated with the Yugoslav government-in-exile and worked through Yugoslav officers who had escaped at the time of the occupation. They also enlarged their intelligence picture by exploiting their privileged access to signals intelligence.
But changing Allied strategic priorities (and competition with the Special Operations Executive - SOE) persuaded SIS in 1943 that they should send British officers into the field to liaise with the Yugoslav resistance forces.