'ME1' was a British naval undertaking by Admiral Sir Andrew Cunningham’s Mediterranean Fleet in support of the MF.1 fast convoy and MS.2 slow convoy from Malta to Alexandria, and in essence a repeat of 'MA3' cancelled on 28 June as a result of an engagement with Italian destroyers (7/10 July 1940).

The operation also included the 'MA5' attack, cancelled after Italian air attacks on the British ships south of Majorca, on Cagliari on the southern coast of the Italian island of Sardinia by aircraft of the fleet carrier Ark Royal supported by the battleships Resolution and Valiant, battle-cruiser Hood, light cruisers Arethusa, Delhi and Enterprise, and destroyers Active, Douglas, Escort, Faulknor, Fearless, Forester, Foxhound, Keppel, Velox, Vortigern and Wrestler of Vice Admiral Sir James Somerville’s Gibraltar-based Force 'H'.

The operation led to the 'Battle off Calabria' or, as it is known to the Italians, the 'Battle of Punta Stilo' on 9 July.

When Italy entered World War II in June 1940, its land forces in Libya were poorly trained and badly equipped for offensive operations, and the Italian navy was therefore obliged to start a major effort to organise and escort the major supply convoys that were needed to bring the land forces up to a realistic operational condition. As part of this effort on 6 July a convoy of four merchant ships (11,398-ton passenger ship Esperia, 4,013-ton freighter Calitea, 6,342-ton freighter Marco Foscarini and 6,339-ton freighter Vettor Pisani) departed Naples for Benghazi on the coast of Libya. The merchant vessels were escorted by the 4a Divisione Torpediniere (torpedo boats Orione, Orsa, Pegaso and Procione). The convoy was joined on 7 July, off Messina, by the 6,343-ton freighter Francesco Barbero that had sailed from Catania under escort of the torpedo boats Abba and Pilo. On board there were 2,190 troops, 72 M.11 tanks, 232 trucks, 10,445 tons of supplies and 5,720 tons of fuel. Close escort was provided by Ammiraglio di Divisione Ferdinando Casardi’s 2a Divisione Incrociatori (light cruisers Giovanni delle Bande Nere and Bartolomeo Colleoni) and the 10a Divisione Cacciatorpediniere (destroyers Maestrale, Libeccio, Grecale and Scirocco).

On 7 July a British cruiser force was reported as having arrived in Malta, and the Italian naval high command, the Supermarina, ordered Ammiraglio di Squadra Riccardo Paladini’s 2a Squadra to provide cover for the convoy with the heavy cruiser Pola (flag) supported by the 12a Divisione Cacciatorpediniere (destroyers Lanciere, Carabiniere, Corazziere and Ascari); Ammiraglio di Divisione Pellegrino Matteuci’s 1a Divisione Incrociatori (heavy cruisers Zara, Fiume and Gorizia) supported by the 14a Divisione Cacciatorpediniere (destroyers Vittorio Alfieri, Giosué Carducci, Vincenzo Gioberti and Orione); Ammiraglio di Divisione Carlo Cattaneo’s 3a Divisione Incrociatori (heavy cruisers Bolzano and Trento) supported by the 11a Divisione Cacciatorpediniere (destroyers Artigliere, Camicia Nera, Aviere and Geniere); and Ammiraglio di Divisione Luigi Sansonetti’s 7a Divisione Incrociatori (light cruisers Eugenio di Savoia, Emanuele Filiberto Duca d’Aosta, Muzio Attendolo and Raimondo Montecuccoli) supported by the 8a Divisione Cacciatorpediniere (destroyers Granatiere, Fuciliere, Bersagliere and Alpino). The fleet commander, Ammiraglio di Squadra Inigo Campioni, also departed in company with the 1a Squadra to provide more distant and heavier cover. Campioni’s force comprised Ammiraglio di Divisione Bruno Brinovesi’s 5a Divisione Navi di Battaglia (battleships Conte di Cavour and Giulio Cesare) supported by the 7a Divisione Cacciatorpediniere (destroyers Freccia, Saetta, Dardo and Strale); Ammiraglio di Divisione Antonio Legnano’s 8a Divisione Incrociatori (light cruisers Giuseppe Garibaldi and Luigi di Savoia Duca degli Abruzzi) supported by the destroyers Folgore, Fulmine, Baleno and Lampo; Ammiraglio di Divisione Alberto Marenco di Moriondo’s 4a Divisione Incrociatori (light cruisers Alberico da Barbiano, Amberto di Giussano, Luigi Cadorna and Armando Diaz) supported by the 14a Divisione Cacciatorpediniere (destroyers Ugolini Vivaldi, Antonio da Noli and Leone Pancaldo), the 15a Divisione Cacciatorpediniere (Antonio Pigafetta and Nicolo Zeno) and the 16a Divisione Cacciatorpediniere (destroyers Nicoloso da Recco, Emanuele Pessagno and Antoniotto Usodimare).

Italian submarines were also concentrated to the east of Gibraltar (Emo, Guglielmo Marconi, Dandolo and Barbarigo), north-west of Sardinia (Argo, Iride, Scire and Diaspro), south of Sardinia (Ascianghi, Axum, Turchese, Glauco, Luciano Manara and Ciro Menotti), in the Sicilian Channel (Santorre Santarosa), off Malta (Pier Capponi and Durbo), in the Ionian Sea (Brin, Antonio Sciesa, Ruggiero Settimo and Luigi Settembrini) and between Derna and Gaudo (Beilul, Tricheco, Lafole and Smeraldo).

The Italian tactical plan was to persuade the British, whose Mediterranean Fleet had been reported as leaving Alexandria, that the convoys was heading for Tripoli, farther west, rather than Benghazi. The combined convoy’s escort thus consisted of three groups: eight destroyers and four torpedo boats provided close escort for the merchant vessels; six heavy cruisers and four destroyers provided local escort at a distance of 37 miles (60 km); and the battleships Giulio Cesare and Conte di Cavour, eight light cruisers and 16 destroyers provided heavy but more distant support. A substantial number of the 28 Italian destroyers did not become involved in the forthcoming battle as a result of mechanical problems and the need to refuel.

Meanwhile, the British had started their own convoy support operation. The Mediterranean Fleet sailed from Alexandria for Malta, where the destroyers would deliver supplies and a limited number of specialist reinforcements, and two convoys were taking fleet stores and civilians from Malta to Alexandria. The two groups of merchantmen comprised the 13-kt MF.1 fast convoy and the 9-kt MS.1 slow convoy. Protecting them were three groups of warships: Vice Admiral J. C. Tovey’s Force 'A' comprised the cruisers Orion, Neptune, Gloucester, Liverpool and Australian Sydney of the 7^th Cruiser Squadron together with the Australian destroyer Stuart; Cunningham’s Force 'B' comprised the battleship Warspite and destroyers Nubian, Mohawk, Hero, Hereward and Decoy; and Rear Admiral H. D. Pridham-Wippell’s Force 'C' comprised the battleships Malaya and Royal Sovereign, fleet carrier Eagle (with Nos 813 and 824 Squadrons) and destroyers Hyperion, Hostile, Hasty, Ilex, Dainty, Defender, Juno, Janus and Australian Vampire and Voyager.

There was also a the Malta-based Force 'D' with four and later seven destroyers.

During the morning of 8 July, Somerville’s Force 'H' sailed from Gibraltar with the battle-cruiser Hood, battleships Valiant and Resolution, fleet carrier Ark Royal, light cruisers Arethusa, Delhi and Enterprise, and destroyers Faulknor, Forester, Foresight, Foxhound, Fearless, Escort, Keppel, Douglas, Vortigern, Wishart and Watchman.

The Mediterranean Fleet sortied from Alexandria from 23.30 on 7 July with Force 'A' comprising five cruisers and one destroyer, Force 'B' one battleship and five destroyers, and Force 'C' two battleships, one carrier and 11 destroyers. One of the destroyers, Imperial, had to return to Alexandria with a burst steam pipe early on 8 July.

At 14.40 on 8 July two Cant Z.506 floatplanes from Tobruk spotted the British fleet and shadowed it for nearly four hours. Campioni ordered his fleet to defend the convoy by turning east, so distancing it from the British but entailing a lengthier passage, and preparing for action. The Italian high command was reluctant to risk its warships in a nocturnal engagement, however, and ordered the fleet to avoid contact. As the two fleets manoeuvred in an effort to secure a tactical advantage, the Italians suffered technical problems on three destroyers and two light cruisers, so these, together with several other destroyers, were detached to refuel in Sicily. In order to compensate for this loss of strength, the Supermarina ordered another destroyer group to depart Taranto. At this point, the Italian fleet had 16 destroyers.

At 15.15 on the same day a Short Sunderland long-range flying boat reported an Italian fleet comprising two battleships, six cruisers and seven destroyers some 100 miles (160 km) to the north-west of Benghazi on a northerly heading.

Meanwhile the British too were having difficulties. Between 10.00 and 18.40, 72 Italian land-based bombers attacked the British ships and hit Gloucester's bridge, killing her captain, six officers and 11 ratings; another three officers and six ratings were wounded. The forward fire control and the steering equipment were destroyed, and for the rest of the battle, the cruiser was commanded from the emergency station. While serious and requiring the ship’s retirement from the first line, the damage to Gloucester was the only damage inflicted on the British ships by two series of substantial Italian air attacks. Unlike the dive-bombers favoured by the Germans, Italian bombers operated in formation at high altitudes during the first stages of the war, generally releasing their bombs together at about 12,300 ft (3750 m). In the 'Battle off Calabria', the Italians therefore carried out the ultimate test of the claims of pre-war air power theorist about the viability of massed bombing as an effective weapon against modern warships. However, fast-moving ships proved to be a far more difficult target than anticipated. In addition, captains waited until the bombers were seen to be releasing their bombs and then used the time of the bombs' descent to sea level to take effective evasive action.

At 15.10 the British fleet steamed toward Taranto in an effort to cut the Italian fleet’s route back to base, but at dusk, Cunningham changed course from 310° to 260° and slowed the fleet’s speed. During the night of 8/9 July, the Italians deciphered British radio signals and ordered their fleet to prepare for action about 65 miles (105 km) to the south-east of Punta Stilo. During the first hours of 9 July the British ships adopted a course of 305° to avoid the Italian air reconnaissance while still keeping between the Italian fleet and the Gulf of Taranto. By 12.30 the Italian command had no accurate information about the British fleet’s location, and Campioni then instructed his forces to separate, at about 14.00 and about 60 miles (100 km) to the south-east of Cape Spartivento, in search of the British forces. Campioni eventually received reports of the British position at 13.30, and six Meridionali Ro.43 floatplanes were launched shortly after this from the Italian cruisers spotted the British warships some 30 miles (50 km) closer than had been imagined. At 12.00 on 9 July the two fleets were 90 miles (145 km) apart. Held back by the 18-kt maximum speed of Malaya and Royal Sovereign, Cunningham could not close the distance to engage with his full strength, and therefore moved forward with the somewhat faster Warspite and most of his other strength. Meanwhile, at 13.15, Eagle launched several unsuccessful Fairey Swordfish bomber sorties against the Italian heavy cruisers, which the aircraft crews took for battleships. At 13.10 the Italian command had instructed Campioni to engage one of the two British forces facing him, but in fact they had planned to keep the action close to Italy and were purposefully moving north in order to draw the British ships closer to their air bases.

By 14.00 Cunningham’s plan to cut off the Italian fleet from Taranto had succeeded, however. The British cruiser group was now spread out in front of Warspite and at 15.15 spotted the Italian main force. The two groups opened fire at a range of 23,500 yards (21500 m). The Italian rangefinding was better than that of the British ships, and within three minutes the Italian ships had found the range even though they were firing at extreme range. Although the British rangefinding was not as good and the British warships had trouble with their rounds falling short, the British gunlaying was better and the British warships were therefore able to place their rounds in much tighter groups. After only a few minutes the range was down to 22,000 yards (20115 m) and the British fire became more effective. However, by 15.22 the Italian fire was falling dangerously close to the British cruisers and Tovey decided to disengage. At this point fragments of a 152-mm (6-in) shell from Giuseppe Garibaldi hit Neptune, damaging her catapult and its reconnaissance seaplane beyond repair. The cruisers continued to open the range, and the engagement ended at 15.30. One group of Italian light cruisers, mistaken for heavy cruisers of the latest 'Zara' class, was on the British side of the battle line and soon within range of the oncoming Warspite. Once again the British rounds fell short, and neither of her targets, Alberico da Barbiano and Alberto di Giussano, received any damage in the initial salvoes. However by this time Warspite was also out of position, and circled so that Malaya could could up to her. Royal Sovereign was still well to the rear. Campioni decided to take on Warspite, and started to manoeuvre his two battleships into position. At 15.52 Giulio Cesare opened fire at a range of 28,870 yards (26,400 m). Conte di Cavour did not fire, a decision many have questioned. The Italian tactic was to have only one ship firing at any one time, for it had been learned in the 1916 Battle of Jutland that with more than one ship firing at a single target it became very difficult for the rangefinding parties to differentiate the fire of each ship and effect the right corrections. Conte di Cavour was responsible for Malaya and Royal Sovereign, which were farther back and did not enter the engagement. Unaware of the Italian firing pattern, Warspite split her guns between the two ships. During the exchange one of Giulio Cesare's rounds fell long and caused damage to Warspite's escorting destroyers, Hereward and Decoy, which had formed up on the far side of the action. At 15.54 Malaya started to fire, although she was still well out of range, in the hope of causing some confusion in the Italian ships.

Meanwhile the Italian heavy cruisers came into action and started firing on Warspite at 15.55, but then had to break off as the British cruisers returned to the fray. At 15.59 two 320-mm (12.6-in) shells from Giulio Cesare fell very close to Warspite. Almost immediately after this one of Warspite's 15-in (381-mm) rounds hit the Italian battleship’s quarterdeck, setting off the stored ammunition for one of her 37-mm anti-aircraft guns. Two men were killed and several others wounded, and the fumes from the burning ammunition were sucked down into the engine room, which had to be evacuated after half of the boilers had been shut down. Giulio Cesare's speed quickly fell off to 18 kt, and Conte di Cavour took over the primary role. Giulio Cesare and Warspite were well over 26,000 yards (23775 m) apart at the time of the British hit on the Italian battleship, which was one of the longest-range naval artillery hits in history. It would appear that Warspite was in an excellent position to hammer the slowing Giulio Cesare, but she once again executed another tight turn to allow Malaya to catch up. With her guns suddenly silenced during the turn, the rangefinders on Malaya discovered what the Italians had been intending to avoid, that her rounds were falling 2,700 yards (2470 m) short of Giulio Cesare and that they had in fact been spotting Warspite's rounds. After Bolzano had suffered minor damage, Campioni ordered the 9a Divisione Cacciatorpediniere (Vittorio Alfieri, Alfredo Oriani, Giosué Carducci and Vincenzo Gioberti), 7a Divisione Cacciatorpediniere (Freccia and Saetta), 11a Divisione Cacciatorpediniere (Artigliere, Camicia Nera, Aviere and Geniere), 12a Divisione Cacciatorpediniere (Lanciere, Carabiniere, Corazziere and Ascari) and 14a Divisione Cacciatorpediniere (Leone Pancaldo and Ugolini Vivaldi) to make smoke from 16.01 and thus shield the battleships. There is some debate about this: the British believed that the battleships were leaving the battle, while the Italians claimed that they were attempting to make a torpedo attack with their destroyers from within the smoke.

At 15.58 Fiume resumed fire on Liverpool, her counterpart in the British line, and soon two groups of Italian cruisers were in combat with the main British cruiser group. Firing continued as both groups attempted to form, and at 16.07 Bolzano was hit three times by 6-in (152-mm) shells from Neptune, temporarily locking her rudder and inflicting two fatalities in the torpedo room. A near miss on the destroyer Vittorio Alfieri caused minor damage.

Meanwhile the engineering team on Giulio Cesare had been able to repair two of the four damaged boilers, allowing the battleship to reach 22 kt. Campioni, considering the possibilities of his remaining battleship, Conte di Cavour, against three British battleships and an aircraft carrier, decided to withdraw his battleships toward Messina. Giulio Cesare was out of action for 30 days.

Over the next hour both fleets attempted without success to use their destroyer forces for long-range torpedo attacks. At 16.40 the Italian air force made an attack with 126 aircraft, reporting damage to Eagle, Warspite and Malaya; because of a misunderstanding, however, 50 of the Italian bombers also attacked the Italian ships, although without inflicting any damage.

The battle ended at 16.50 with both sides withdrawing. One final victim was the destroyer Leone Pancaldo, sent to Augusta in Sicily and hit by a torpedo launched from a Swordfish at 09.40 on the following day. The ship sank in shallow water, but was later refloated and returned to service in December 1941.

After the battle both fleets turned for home. This allowed the Italians to claim a victory of sorts, as their convoy was already past the action by this time and reached Libya without loss. Meanwhile, the British convoys also reached Alexandria along with their escort. However, it was clear that the British gunnery was superior to that of the Italians and, while the damage to Giulio Cesare was light, it had become clear that the Italian salvoes were too widely dispersed as a result of technical factors that were not to be overcome until the end of the conflict. Although the battle was indecisive in overall terms, the British believed that they had gained an important 'moral ascendancy' over the Italians.

Off to the west, numerous attacks on Somerville’s Force 'H' by Savoia-Marchetti SM.79 bombers flying at great altitude managed to achieve only a number of near-misses close to Hood, Resolution and Ark Royal, but these cause only splinter damage.