Against the advice of Force 136, which had been in the city for several weeks, Mallaby went to the centre of Surabaya to negotiate the cessation of attacks on a company of Mahrattas besieged in the International Bank, a large office building. Having achieved a momentary respite, he sent his Brigade Major and a Force 136 officer to deliver a protest to the nearby TKR HQ, but they were killed by the mob. Unaware of their fate, Mallaby gathered a group of moderate Indonesian leaders and toured under a white flag through the centre of Surabaya, calling for calm. This did not work.

The convoy was surrounded by an armed mob in the square in front of the International Bank, and the moderates melted away. Mallaby and two officers remained in their car, unarmed except for a concealed grenade, while another officer was allowed to enter the building to talk to Major Venu Gopal, the Mahratta company commander. Mallaby seems to have wanted the Mahrattas to be allowed to lay down their arms and leave the building, in the hope that some at least would survive. What his orders were, and what was said inside remains disputed, but within 15 minutes the Mahrattas opened fire on the armed Indonesians pressing into the building and "soon cleared the square". Major Gopal — no desk warrior he — later testified that the order to fire was his and his alone. Stranded in no-man's-land, Mallaby was shot dead in his car by an Indonesian youth, who was himself killed by the grenade thrown by the junior officers. 

"The shock of Mallaby's murder went through the army like a lightning bolt," according to my father, Louis Heren, who was in Surabaya with Force 136. "We thought we were the good chaps who had won the war and been sent to help people get on with their lives. Instead, we seemed to be the most hated people on earth. After that we took no chances."

A ceasefire of sorts was patched up the following day, allowing isolated British units and some civilians to be withdrawn to their base round the port. The Surabaya militants were jubilant, but the British reaction was not long coming. Christison sent 5th Indian Division — some 10,000 men — with tanks and air support to recapture Surabaya and, though this was not publicly acknowledged, to teach the Indonesians a lesson.

The second Battle of Surabaya raged from November 10-29, and is thought to have cost the lives of 9,000 Indonesian fighters. November 10 is commemorated as Heroes' Day in Indonesia.

For the British, the Surabaya episode confirmed that they could not trust Indonesian politicians to control their people. As the British could not leave Java until the Dutch had returned in force — at which point it would be their problem — they focused their attention on maintaining order in the bridgeheads and continuing to succour PoWs and vulnerable civilians.