Asquith and his wife Margot. Margot was especially opposed to the deal with Lloyd George, and her argument with her husband (lasting into the wee hours of December 4) may have helped convince him to break with Lloyd George. The two are great-grandparents to the actress Helena Bonham Carter.
December 4 1916, London–Tensions had been mounting between PM Asquith and War Secretary Lloyd George for some time now. Asquith’s proposal to reorganize the War Committee and split off its civilian aspects was especially troubling to Lloyd George, who realized it would greatly diminish his authority over the war effort. He made a counter-proposal to Asquith on the evening of Sunday December 3, in which instead the War Committee would be drastically reduced in size, with Lloyd George as chairman and Asquith excluded entirely. Asquith would still have the authority to veto any decision made by the War Committee, however. Asquith agreed to this proposal, and decided that he would do a full shakeup of the cabinet to signal the change in direction.
Details of the agreement leaked to the press by Monday morning, however, and the coverage was extremely unfavorable to Asquith, especially in the otherwise-reliable The Times, which was positively rejoicing that Asquith would be relegated to the sidelines by the move. This had not been Asquith’s intention at all, and he began to regret his decision. This was only confirmed at meetings with other Liberal ministers over the course of the day. Many of them had their own reasons for opposing the deal, as their role in the management of the war would be greatly reduced if they were not included in the smaller War Committee. They argued to Asquith that if he went forward with this deal, he would be Prime Minister in name only; the Prime Minister should be the one to lead the war effort. The veto power included in the deal was not enough, as it would be too politically charged to ever use for any but the largest decisions.
After hearing reassurances from his Liberal colleagues, and encouraging (if actually noncommittal) words from several of his Conservative coalition partners, Asquith decided on the evening of December 4 that he would cancel the deal with Lloyd George. He told him that Prime Minister must chair the War Council and pick its members, and refused to replace Balfour at the Admiralty as Lloyd George had requested. Asquith knew this would be the final showdown with Lloyd George–after the next few days, one of them would no longer be in government. Asquith was confident that he had the backing of the Commons and his Cabinet, and would prevail.
Sources include: George H. Cassar, Asquith as War Leader.