At a meeting of the North Atlantic Treaty Organization (NATO) in Paris in December 1953, U.S. Secretary of Defense Charles E. Wilson raised the possibility of a joint medium-range ballistic missile development program (MRBM). Discussions took place in June 1954 and resulted in the signing of an agreement on August 12, 1954.   The United Kingdom, with the help of the United States, would develop an MRBM called Blue Streak.  The cost was originally estimated at $70 million (or $1.7 billion in 2016), with the United States paying 15 percent.  In 1958, the project was in trouble. Its deployment was still a long way off, but the United States supplied U.S.-built Thor missiles as part of the Emily Project in the United States, and there were fears that the liquid would fuel Blue Streak` vulnerability to a pre-emptive nuclear attack.   The Nassau Agreement became the basis of the Polaris sales contract, signed on April 6, 1963. As part of the agreement, British nuclear warheads were mounted on Polaris missiles.
As a result, responsibility for British nuclear deterrence has shifted from the RAF to the Royal Navy. French President Charles de Gaulle cited Britain`s dependence on the United States under the Nassau Agreement as one of the main reasons for vetoing Britain`s application to join the European Economic Community (EEC) on 14 January 1963. The Nassau Agreement, concluded on December 22, 1962, was a treaty negotiated between President John F. Kennedy for the United States and Prime Minister Harold Macmillan for the United Kingdom. The agreement enabled the British Polaris programme. In particular, they discussed the current state of negotiations on a treaty to end nuclear tests and reaffirmed their intention to seek agreement with the USSR on this issue, in the hope that this agreement would lead to fruitful negotiations on broader disarmament issues. Under a previous agreement, the United States agreed to provide Skybolt missiles to allow the installation of a submarine base for ballistic missiles at Holy Loch, near Glasgow. The British government then cancelled the development of its medium-range ballistic missile, known as Blue Streak, leaving Skybolt as the basis for the UK`s independent nuclear deterrent in the 1960s. Without Skybolt, the Royal Air Force (RAF) V-bombers would likely become obsolete because they would not be able to enter the enhanced air defence that the Soviet Union would have to deploy in the 1970s.
The Nassau Agreement, concluded on December 21, 1962, was an agreement negotiated between the President of the United States, John F. Kennedy, and Harold Macmillan, Prime Minister of the United Kingdom, to end the Skybolt crisis. A series of three-day meetings between the two leaders in the Bahamas was followed by Kennedy`s announcement that the Skybolt air-launched missile project would be halted. The United States has agreed to supply the United Kingdom with Polaris submarine missiles for the British Polaris program. Prime Minister Harold Macmillan met with President Dwight Eisenhower at Camp David, near Washington, in March 1960, and secured permission to buy Skybolt without any strings. In exchange, the Americans obtained permission to deploy the US Navy`s Polaris-equipped submarines to St. Loch, Scotland.  The financial settlement was particularly favourable for the United Kingdom, as the United States increased only Skybolt`s unit costs and thus oversaw all research and development costs.  Mountbatten was disappointed, as was Burke, who had to deal with Skybolt`s possible survival at the Pentagon.  What was agreed specifically with respect to Polaris was not clear; the Americans wanted any subsequent offer from Polaris to be part of a plan to send NATO MRBM, known as the Multilateral Force.  By the Skybolt Agreement, the Minister of Defence, Harold Watkinson, announced on 13 April 1960 the cancellation of Blue Streak in the House of Commons.  The next day, during the opening presentations, Macmillan outlined the UK`s contributions to the development of the atomic bomb and stated unequivocally that the United Kingdom would continue to have a nuclear power