In the summer of 1943, the British adopted a new strategy in the eastern Mediterranean. To distract Hitler from the main theater of European invasion planned to cross the English Channel in 1944, the British enlisted the cooperation of ELAS in simulating preparations for a major invasion in the Mediterranean. The strategy had credibility because of Britain's attempted invasion of the Ottoman Empire at Gallipoli in World War I. Although all resistance movements were to participate in the plan, ELAS was especially crucial because it controlled the largest army and occupied the most territory. Accordingly, in July 1943 Britain agreed to give ELAS additional support if ELAS would end its campaign against rival resistance groups.

However, in August a disastrous series of meetings in Cairo among guerrilla leaders, the king, and the government-in-exile removed all prospects of cooperation. The resistance leaders demanded guarantees that a plebiscite on the monarchy be held before the king returned to Greece, and that the postwar government include ELAS members heading the ministries of the interior, justice, and war. Britain, whose main goal was ensuring continued stability and British influence in the postwar eastern Mediterranean, continued its pattern of intervention in Greek politics by supporting George's refusal of both demands. From that point to the end of the war, the government-in-exile and the EAM resistance were opponents rather than allies.

The immediate result of the Cairo meetings was the onset of civil war between ELAS and EDES in October. Forced to choose, the British stepped up arm shipments to EDES while cutting off the supply to ELAS. This maneuver proved ineffective because the surrender of the Italian forces in September had provided ELAS with enough arms and munitions to be independent of outside supply. Having stabilized its position militarily, EAM declared the formation of a Political Committee of National Liberation (Politiki Epitropi Ethnikis Apeleftheroseos--PEEA) with its capital in the heart of liberated Greece.

The British, alarmed at the prospect of a communist takeover after the war, took steps to resist validation of the PEEA. In October 1944, Churchill and Soviet leader Joseph V. Stalin agreed (without the knowledge of any Greek faction) that postwar Greece would be in the British sphere of influence and that the Soviet Union would not interfere. In return, Churchill conceded Soviet control of postwar Romania.