Singapore-United States ties were roiled in September 1965 after it was revealed that the Central Intelligence Agency (CIA) had offered the Singapore Government US$10 million to hush up the arrest of an American intelligence officer.
Prime Minister Lee Kuan Yew revealed details of the 1960-1961 episode in an interview with foreign correspondents that was televised on Aug 30.
He cited the incident to make the point that even if the British withdrew their military base from Singapore, an American military base would not be welcome.
He said: "If the British withdraw, I am prepared to go on with the Australians and the New Zealanders. But I'm not prepared to go on with the Americans."
Asked to elaborate, Mr Lee said that while the Americans were "a highly intelligent, often well-meaning people", their government generally "lacks depth of judgment or wisdom". He then disclosed how an American CIA agent had tried in 1960 to bribe a Singapore intelligence officer to feed information to the agency.
But the Singapore officer reported this to his superior and a trap was laid for the CIA officer, who was later caught and faced up to 12 years in jail.
"We had got them by the throat. The American Consul-General, shaking at his knees, knew nothing about it," said Mr Lee.
He said the US government had been told that all would be kept under wraps if US$100 million was given to the Singapore Government for economic development.
But through an intermediary, the Americans came back with an offer of US$10 million - an "insult", Mr Lee said.
In the end, he said, Singapore released the man, as charging him in an open court would have harmed relations with Kuala Lumpur.
"We wanted merger, Malaysia. We fought for it, and the Americans would have worked on Kuala Lumpur and we would have been so antagonistic, and merger and Malaysia would have broken," he said.
The US responded with a denial, prompting Mr Lee to make public a letter of apology from US Secretary of State Dean Rusk for "improper activities" by American officials.
But State Department officials believed Mr Lee's broadside at the US was meant to underline that he identified with Asians and Africans ready to pursue a neutral course.
Another view was that Mr Lee wanted to improve his position internally against the left-wing Barisan Sosialis.
Yet another view was that he was feeling the strain since Singapore's separation from Malaysia.
In July 1967, Britain announced it would withdraw its troops from Singapore by the 1970s.
In March that year, Singapore had introduced national service to build up its own armed forces.
