British played an important role in the event of merger and separation of Singapore and Malaysia in 1963 to 1965 causing long term implications in the political relationship between the two countries. The aim of this study is to analyse the British policies towards Singapore and Malaysia relationship from 1959 until 1969. The research had made use of historical documents as primary sources on Singapore, Malaya and British at the National Archives of Malaysia, National Archives of Singapore and the Public Record Office in London and also used related secondary sources as the supporting sources. The research finding showed British played a role in determining the pattern and relationship between Malaysia on economy and safety factors. Since 1955, British had showed interest to give Singapore towards self-government through the election process and the legislation of the new constituent in 1957. PAP’s victory in the 1959 election had seen Lee Kuan Yew urging the British to give Singapore the self-government promptly. Nevertheless, British was not ready to let go of Singapore due to the anxiety of the developed influence of the Malayan Communist Party through Communist United Front in Singapore. PAP’s lost in the Hong Lim by-election had worried British on the communist influence which will take over Singapore if they had won the 1963 election. British had made Malaya its ‘buffer state’ so it would be responsible on Singapore’s safety. In 1959, Singapore was given the self-government by the British and a safety body was formed, which is Internal Security Council (ISC), which consists of British representatives, Malaya and Singapore. British had introduced the Grand Design idea as a solution to hinder the Communist influence in Singapore. The merger of Singapore into Malaya had been opposed by the Opposition Parties in Malaya which had brought many problems. British did not react when Lee Kuan Yew and PAP leaders intervene in the Peninsular Malaysia’s politics touching on the importance of the Malays. This situation had caused the Malays’ wrath in Malaysia and Singapore which had ignited hideous riots in Singapore in 1964. Tunku Abdul Rahman had to separate Singapore from Malaysia due to the uncompromised hostility of Lee Kuan Yew and the PAP leaders. British interfered in order to rescue Singapore’s relationship so it would remain in Malaysia, but it had failed although discussions were held between the leaders of Singapore, Malaysia and the British Officers. The separation of Singapore from Malaysia was the Grand Design’s failure as introduced by the British. The effect of the separation had led to the 1963 Malaysian Act to be re-debated; a re-study had to be made on the economy and safety in the context of sovereignty of both countries. Finally, British had to withdraw its army from the Singapore base and Southeast Asia regions in 1971.