The 'Battle of Cape Spada' was a naval battle between British and Italian naval forces in the Mediterranean Sea off Cape Spada, the north-western extremity of Crete, within the context of the British 'ME1' operation to support a pair of convoys from Malta to Alexandria on the northern coast of Egypt (19 July 1940).

The battle occurred when a British naval squadron patrolling the Aegean Sea encountered two Italian cruisers transferring from Tripoli in northern Libya to Léros, at that time an Italian colony in the Dodecanese islands group. The Allied squadron was commanded by an Australian officer, Captain J. A. Collins on board the light cruiser Sydney and included the British 'H' class destroyers Havock, Hyperion, Hasty and Hero and the similar 'I' class destroyer Ilex. The Italian 2a Divisione Incrociatori was commanded by Ammiraglio di Divisione Ferdinando Casardi, and consisted of the high-speed light cruisers Giovanni delle Bande Nere and Bartolomeo Colleoni.

When the Italians encountered the Allied destroyers at about 07.30, Sydney and Havock were 40 miles (64 km) to the north on a sweep for submarines. The other destroyers led the Italian cruisers on a chase to the north in order to give Sydney time to come to the rescue. Sydney sighted the Italian ships at 08.26, and opened fire at 08.29 with her 6-in (152-mm) guns, whereupon the Italian cruisers turned away to the south-west.

In the running battle which followed, Bartolomeo Colleoni was hit hard by Sydney and after a shell tore through her unarmoured hull: the boilers and guns were disabled at 09.23, leaving the Italian light cruiser dead in the water. She continued to fought, but was unable to manoeuvre or use her main battery of 152.4-mm (6-in) guns. Despite the fire of her 100-mm (3.94-in) secondary guns, she was sunk by three torpedoes launched from Ilex and Hyperion at 09.59. Sydney continued to fire on Giovanni delle Bande Nere, and although the Australian light cruiser was struck in the funnel by a single Italian shell, she managed to hit Giovanni delle Bande Nere at least twice, killing eight men in the bow and the hangar. Sydney later disengaged because she was short of ammunition and Giovanni delle Bande Nere returned to Benghazi in northern Libya, shadowed by the British battleship Warspite and a screen of destroyers. Some 555 survivors of Bartolomeo Colleoni were rescued, and 121 men died.

Despite their speed advantage, the Italian cruisers had failed to outrun Sydney because they had to steer south-south-west, instead of the most obvious route of escape to the south, in order to avoid being trapped between the Australian and British ships and the shore of Crete. This gave the Australian cruiser the chance to close the range, and the the light armour of Bartolomeo Colleoni and Giovanni delle Bande Nere was unable to withstand Sydney's rounds. The lack of Italian air reconnaissance was another factor which contributing to the successful Allied chase.

After the battle had ended, the British destroyers were bombed by Italian aircraft, which damaged Havock, whose no. 2 boiler was flooded. A floatplane from Warspite, which was searching for Giovanni delle Bande Nere, ditched in the sea and was lost near Tobruk, its crew being taken prisoner by the Italians. The Allied 'AN.2' convoy was ordered to steam back to Port Said and remain there until it had eventually become known that Giovanni delle Bande Nere had reached Benghazi.