the unit cost of Skybolt, absorbing all the research and development costs. With this agreement in hand, the cancellation of Blue Streak was announced in the House of Commons on 13 April 1960. The subsequent American decision to cancel Skybolt created a political crisis in the UK, and an emergency meeting between Macmillan and President John F. Kennedy was called in Nassau, Bahamas. Macmillan rejected the US offers of paying half the cost of developing Skybolt, and of supplying the AGM-28 Hound Dog missile instead. This brought options down to Polaris, but the Americans would only supply it on condition that it be used as part of a proposed Multilateral Force (MLF). Kennedy ultimately relented, and agreed to supply Britain with Polaris missiles, while "the Prime Minister made it clear that except where Her Majesty's Government may decide that supreme national interests are at stake, these British forces will be used for the purposes of international defence of the Western Alliance in all circumstances." A joint statement to this effect, the Nassau Agreement, was issued on 21 December 1962. Negotiations With the Nassau Agreement in hand, it remained to work out the details. Vice Admiral Michael Le Fanu had a meeting with the United States Secretary of Defense, Robert S. McNamara, on 21 December 1962, the final day of the Nassau conference. He found McNamara eager to help, and enthusiastic about the idea of Polaris costing as little as possible. The first issue identified was how many Polaris boats should be built. While the Vulcans to carry Skybolt were already in service, the submarines to carry Polaris were not, and there was no provision in the defence budget for them. Some naval officers feared that their construction would adversely impact the hunter-killer submarine programme. The First Sea Lord, Admiral of the Fleet Sir Caspar John, denounced the "millstone of Polaris hung around our necks" as "potential wreckers of the real navy". The number of missiles required was based on substituting for Skybolt. To achieve the same capability, the BNDSG calculated that this would require eight Polaris submarines, each of which would have 16 missiles, for a total of 128 missiles, with 128 one-megaton warheads. It was subsequently decided to halve this, based on the decision that the ability to destroy twenty Soviet cities would have nearly as great a deterrent effect as the ability to destroy forty. The Admiralty considered