In 1956, whilst serving with the Royal Air Force at Headquarters Malaya, Air Commodore A V R Johnstone was invited by Tengku Abdul Rahman to become a member of the Armed Forces Council, a committee chaired by the Tengku and otherwise comprising senior Malayan Army officers, civil servants from the Ministry of Defence and officials from the Department of Finance. The Council's Terms of Reference related only to the setting up of permanent forces Malaya and was concerned with the day to day running of the Emergency, which was still being handled by the Director of Operations and his staff.
It had been agreed previously that the British Government would bear the capital cost of equipping the new Air Force but that its upkeep, or recurring costs, would be the responsibility of the Government of Malaya after Independence. Therefore, when the original plans were being drawn up, the limiting factor was the size of the annual budget allocated to the RMAF. An estimated sum of $M 15,000.000 was fixed (although later much reduced when the bottom fell out of the Tin Market) around which Commodore Johnstone was asked to submit proposals for the creation of an Air Force.
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