This article narrates the long-standing diplomatic relationship between Malcolm MacDonald and Brunei. Macdonald played a significant role in safeguarding Brunei's survival as an independent Malay Islamic sultanate during decolonisation. He prevented Brunei from becoming a British crown colony in 1946 unlike the neighbouring states of Sarawak and North Borneo. Having failed to unite the three North Borneo territories into a federation, he may have concurred with Brunei's decision to opt out of the Malaysian Federation in August 1963 and thereafter. Due to his empathy with the Brunei sultans, especially Omar Ali Saifuddin the III, MacDonald's approach for Brunei's future contradicted the vision of his contemporaries for democratising Brunei.

This article examines the history and functions of the Brunei State Council (1907—1959). Although a "rubber stamp" to the British Resident's decisions until 1950, thereafter the Council, dominated by the nominees of a new and strong Sultan, Omar Ali Saifuddin III, became an Achilles heel to the British officialdom that yielded maximum power to the traditional elements under the Constitution promulgated in 1959.