A change of government took place in Britain on May 1940 when Winston Churchill became the prime minister (1940–45). In addition, the fall of France saw the softening of the attitude of the Indian National Congress in India regarding its demands. Britain was in immediate danger of Nazi occupation, and as the war was taking a menacing turn from the allied point of view, congress offered to cooperate in the war if a transfer of authority in India was made to an interim government. The British government's response to these demands was a statement delivered by the then Viceroy, Lord Linlithgow, known as the August Offer.
On 8 August 1940, early in the Battle of Britain, the Viceroy of India, Lord Linlithgow, made the so-called August Offer, a fresh proposal promising the expansion of the Executive Council to include more Indians, the establishment of an advisory war council, giving full weight to minority opinion, and the recognition of Indians' right to frame their own constitution (after the end of the war). In return, it was hoped that all parties and communities in India would cooperate in Britain's war effort.
Linlithgow attempted to solve the Congress-Raj stalemate over popular control of India’s defense. Linlithgow prefaced his proposal by re-iterating that the differences in ideologies that separate the All India Muslim League and the Indian National Congress must be bridged before any significant constitutional settlement is made. Nevertheless, the viceroy announces that the British government is now willing to move forward with governmental changes that will “associate Indian public opinion with the conduct of the war.”
Linlithgow was authorized to admit a limited number of Indian politicians to his executive council and to establish a war advisory council that included Princes, politicians and other interests in the national life of India. However, Linlithgow warned the politicians that his proposal does not imply that there would be any revision of the Government of India Act.
The declaration marked an important advance over the existing state of things, as it recognised at least the natural and inherent right of the people of the country to determine the form of their future constitution, and explicitly promised dominion status.
The following proposals were put in: