'Tunnel' (ii) was a British naval interception operation to destroy or capture a German blockade runner in the Channel Islands area of the English Channel (2/3 October 1943).

Late in 1943, the British became aware of the approach of the 6,408-ton German blockade runner Münsterland, which had departed Brest in north-western France after arrival from Japan with a cargo of latex and metals of major importance to the German war effort. The Germans had a well-planned and carefully rehearsed procedure for the escort of such vessels in the late stages of their passages, and the British reacted by executing 'Tunnel' (ii), which was a similarly a standardised operation in which all available ships attempted to effect an interception. Reservations about the undertakings were expressed to senior staff officers, but went unheeded. The light anti-aircraft cruiser Charybdis, whose primary armament was 5.25-in (133-mm) dual-purpose guns, was assigned to the operation on 20 October, and on 22 October the British force put to sea with Charybdis, the fleet destroyers Grenville and Rocket, and the 'Hunt' class escort destroyers Limbourne, Wensleydale, Talybont and Stevenstone.

The main strength of Münsterland's escort comprised five 'Typ 39' torpedo boats of Korvettenkapitän Franz Kohlauf’s 4^th Torpedoboots-Flottille, and the meeting of these two forces resulted in the Battle of Sept Iles off the northern coast of Brittany during the night of 22/23 October. The battle took place off the Sept Iles near the French coast on the southern side of the English Channel, and was the last surface fleet action of World War II in which the Royal Navy was defeated and also the last in which the Germans gained victory.

Six German minesweepers of Korvettenkapitän von Blanc’s 2^nd Minensuch-Flottille and two radar-equipped patrol boats provided the initial escort for Münsterland in a well-rehearsed procedure, which was soon reinforced by five 'Typ 39' torpedo boats of the 4^th Torpedoboots-Flottille.

Soon after 00.00, the British force conducted a radar sweep at 13 kt in an area some 8.1 miles (13 km) to the west of Brittany. Meanwhile, at the same time German radar operators picked up the British ships, carefully tracked them and then promptly relayed the information to the German ships. These warnings were intercepted by the 'Hunt' class destroyers and by Plymouth Command, but for some reason Charybdis did not do so.

Münsterland was now turned back to keep her out of harm’s way, while the German torpedo boats prepared to deal with the British force. Charybdis detected the German vessels on her own radar at a range of 14,000 yards (12800 m) at 01.30 and signalled the destroyers to increase speed. Only the rearmost destroyer, Wensleydale, picked up this signal, however, and her overtaking of the rest of the force caused confusion, compounded when the first German torpedoes arrived and friendly star shells illuminated the leading British rather than the German ships. By now the British formation had lost cohesion.

The British force was visible against the lighter horizon and the Germans were further aided by a rain squall approaching from the south-west. Visibility was poor with low clouds, and there was a long heavy swell. Kohlauf spotted the larger silhouette of the British cruiser and, believing he had been surprised, gave the immediate order to turn and fall back, although not before ordering every ship to launch its torpedoes.

Charybdis could have inflicted considerable damage, but the Germans had only been spotted on radar without any visual conformation. A total of 24 torpedoes was launched by the Germans, and British look-outs suddenly sighted the straight white tracks of torpedoes. Before anything could be done, Charybdis was hit on the port side by a torpedo from T 23, the detonation flooding no. 2 dynamo room and B boiler room. The port electrical ring main failed, and the cruiser listed 20° to port and came to a halt. Torpedoes narrowly missed Wensleydale and Grenville, and then a second torpedo, this time launched by T 27, struck Charybdis. The after engine room was hit and flooded, cutting all electrical power and increasing the list to 50°.

Within minutes of the second torpedo hit on Charybdis, T 22 scored a hit on Limbourne, exploding her forward magazine. She listed heavily to starboard with her bow blown off, and the crew subsequently abandoned ship. Charybdis sank within 30 minutes with the loss of more than 400 men including her captain, Captain G. A W. Voelcker. The other destroyers had near misses from collisions in the confusion and then withdrew, ending the battle.

The British force, now led of Lieutenant Commander R. P. Hill of Grenville, came back only after it had discovered Limbourne's crippling, and then undertook a rescue operation: 107 men of Charybdis's crew were rescued through the morning and day. The severely damaged Limbourne had lost 42 members of her crew and, after an attempt to take the destroyer in tow had failed, Limbourne was be scuttled: she was sunk by torpedoes from Talybont and gunfire from Rocket; 100 survivors were recovered.

The action was the last clear German naval victory of the war as well as being the last defeat of the Royal Navy. Lessons were learned by the British, and despite the setback 'Tunnel' (ii) was in general successful as only four out of 15 blockade runners reached France. Münsterland returned to port in St Malo unscathed but the blockade running mission had been aborted. On her eventual attempt to move out, she was forced ashore and destroyed west of Cap Blanc Nez by fire from British coastal artillery at Dover on 21 January 1944.