1961

On 27 May 1961, Abdul Rahman proposed the idea of forming "Malaysia", which would consist of Brunei, Malaya, North Borneo, Sarawak, and Singapore, all except Malaya still under British rule. It was stated that this would allow the central government to better control and combat communist activities, especially in Singapore. It was also feared that if Singapore became independent, it would become a base for Chinese chauvinists to threaten Malayan sovereignty.

The proposed inclusion of British territories besides Singapore was intended to keep the ethnic composition of the new nation similar to that of Malaya, with the Malay and indigenous populations of the other territories cancelling out the Chinese majority in Singapore.  At the Commonwealth Prime Ministers Conference in 1961, Abdul Rahman explained his proposal further to its opponents. In October, he obtained agreement from the British government to the plan, provided that feedback be obtained from the communities involved in the merger. Members of the Cobbold Commission were formed to conduct a study in the British Borneo territories of Sarawak and Sabah to see whether the two were interested in the idea to form the Federation of Malaysia with Malaya and Singapore.

The Cobbold Commission, named after its head, Lord Cobbold, conducted a study in the Borneo territories and approved a merger with North Borneo and Sarawak; however, it was found that a substantial number of Bruneians opposed merger. North Borneo drew up a list of points, referred to as the 20-point agreement, proposing terms for its inclusion in the new federation. Sarawak prepared a similar memorandum, known as the 18-point agreement. Some of the points in these agreements were incorporated into the eventual constitution, some were instead accepted orally. These memoranda are often cited by those who believe that Sarawak's and North Borneo's rights have been eroded over time. A referendum was conducted in Singapore to gauge opinion, and 70% supported merger with substantial autonomy given to the state government. The Sultanate of Brunei withdrew from the planned merger due to opposition from certain segments of its population as well as arguments over the payment of oil royalties and the status of the sultan in the planned merger.

After reviewing the Cobbold Commission's findings, the British government appointed the Landsdowne Commission to draft a constitution for Malaysia. The eventual constitution was essentially the same as the 1957 constitution, albeit with some rewording; for instance, giving recognition to the special position of the natives of the Borneo States. North Borneo, Sarawak and Singapore were also granted some autonomy unavailable to the states of Malaya.

Indonesia- Malaysia Confrentation

1963

After reviewing the Cobbold Commission's findings, the British government appointed the Landsdowne Commission to draft a constitution for Malaysia. The eventual constitution was essentially the same as the 1957 constitution, albeit with some rewording; for instance, giving recognition to the special position of the natives of the Borneo States. North Borneo, Sarawak and Singapore were also granted some autonomy unavailable to the states of Malaya. After negotiations in July 1963, it was agreed that Malaysia would come into being on 31 August 1963, consisting of Malaya, North Borneo, Sarawak and Singapore. The date was to coincide with the independence day of Malaya and the British giving self-rule to Sarawak and North Borneo. However, Indonesia and the Philippines strenuously objected to this development, with Indonesia claiming Malaysia represented a form of "neocolonialism" and the Philippines claiming North Borneo as its territory. The opposition from the Indonesian government led by Sukarno and attempts by the Sarawak United People's Party delayed the formation of Malaysia. Due to these factors, an eight-member UN team was formed to re-ascertain whether North Borneo and Sarawak truly wanted to join Malaysia.

Malaysia formally came into being on 16 September 1963, consisting of Malaya, North Borneo, Sarawak, and Singapore. In 1963 the total population of Malaysia was about 10 million.

On 9 August 1965, Singapore separated from Malaysia to become an independent and sovereign state.The separation was the result of deep political and economic differences between the ruling parties of Singapore and Malaysia, which created communal tensions that resulted in racial riots in July and September 1964. At a press conference announcing the separation, then Singapore Prime Minister Lee Kuan Yew was overcome by emotions and broke down. Singapore’s union with Malaysia had lasted for less than 23 months.