Donald Maclean mentions the Chalfont Affair in his book British Foreign Policy Since Suez 1956-1968.
I'll come back to this when I have read more, but for the moment, here is an extract from The Official History of Britain and the European Community, Vol. II: From Rejection to Referendum, 1963-1975: 2 (Government Official History Series)
by Stephen Wall
The British Government had a small crisis of their own to tackle. On 26 October, Lord Chalfont, the Minister of State at the Foreign Ofﬁce responsible for European matters, gave an unattributable Press briefing at the conclusion of an EFTA meeting in Lausanne. During the briefing Chalfont got into discussion with the correspondents on what would happen if Britain’s application to join the EEC were to fail. His replies led to British Press stories, inevitably picked up and replayed in the Continental Press, to the effect that, in the event of a French veto, the Labour Government would withdraw the army of the Rhine from Germany and would rethink the situation in West Berlin. All decisions would be concerted with the United States.
The Foreign Ofﬁce denied that there was any basis for the stories. But, for several days, Wilson and Brown considered whether Lord Chalfont had a future in the Government. On 28 October, in the second of two telephone conversations with Brown, Wilson said that “if this morning’s Press was the end of the affair it would probably be best to do nothing since any action in these circumstances would be taken as a panic measure and the Press might again take up the totally unjustifiable story that there was a split on this matter between himself and Brown.
On the other hand, if things did not die down and a hunting party started chasing Lord Chalfont’s scalp, it would be preferable to take early action”. Brown said that if Chalfont was not asked to resign, “it would be necessary to cut him down to size a bit” and to make the seriousness of his action quite plain to him. The Prime Minister said that if Lord Chalfont remained a Minister in the FO there was no need for an immediate decision about his future responsibilities. It was not likely that negotiations would start with the EEC for six months or so and the position could be considered again then. What was particularly damaging about the reports was . . . their effect on European opinion. This would need watching very carefully.
In another telephone conversation the next day Brown said that his present view was that Chalfont should remain a Minister. “All Ministers made boobs from time to time and Lord Chalfont had not made many previously. He would see Lord Chalfont the following day and give him a lecture. The Prime Minister said that he might be asked to submit all his future speeches to the Foreign Secretary”.
On 29 October, the German Ambassador in London telephoned the Permanent Under-Secretary at the Foreign Ofﬁce “in some consternation” to seek reassurance on what Chalfont had said. Gore-Booth told him that the Foreign Ofﬁce statement that the reports of British policy were baseless was the true Gospel.
Wilson himself felt obliged to send messages of reassurance to both President Johnson and Chancellor Kiesinger. To Johnson, Wilson said that he was “particularly sorry to see the scandalous accusation that you and I had been in some kind of consultation beforehand about all this”. To Kiesinger Wilson wrote “I feel I owe it to you to conﬁrm that there is not a word of truth in the fantastic stories about British attitudes and policies that have been ﬂying about Europe this weekend . . . As I told you, we are not taking no for an answer and are not thinking about alternatives, still less about fundamental changes in British policy.”
Palliser, clearly the drafter of these messages, cleared them with the Foreign Secretary during the course of another meeting, presumably Cabinet. Brown commented: “Quite good. But it does all put some inhibitions on any rethinking.
On the following day, Wilson had to defend Chalfont in the House of Commons. Wilson told the House that Chalfont had offered his resignation, that he (Chalfont) had deplored the nature of some of the reports which had appeared and that he (Wilson) had told Chalfont that he could best serve his country by remaining at his post. Wilson also conﬁrmed that there was absolutely no change in British policy.
Kiesinger replied to Wilson on 7 November that he had never believed the Press reports and had no doubt about the unchanged British position towards Germany and Europe.
The French Government, as an unnamed senior French ofﬁcial told his friend Palliser they would, exploit the ‘Chalfont affair’ to the maximum. Even Le Monde had taken the bait in giving much more credence to the affair than it deserved and in giving the impression that Britain had lost its sang froid.