The Sultanate of Brunei at the first welcomed the proposal of a new larger federation. Meanwhile, the Brunei People's Party led by A.M. Azahari desired to reunify Brunei, Sarawak and North Borneo into one federation known as the North Borneo Federation (), where the Sultan of Brunei would be the head of state for the federation—though Azahari had his own intention to abolish the Brunei Monarchy, to make Brunei more democratic, and to integrate the territory and other former British colonies in Borneo into Indonesia, with the support from the latter government. This directly led to the Brunei Revolt, which thwarted Azahari's attempt and forced him to escape to Indonesia. Brunei withdrew from being part of the new Federation of Malaysia due to some disagreements on other issues while political leaders in Sarawak and North Borneo continued to favour inclusion in a larger federation.