According to Patrick Keith in his book, " Ousted", the separation of S'pore from M'sia is the differing perceptions of M'sia, which Lee Kuan Yew wanted and that which the Tunku was willing to accomodate.
In essence, the Alliance Party which was just beginning to learn how to share power amongst it's component members, just found Lee Kuan Yew's aggressive inroads to push a Malaysian Malaysia concept was too disruptive. It's not just the Malays in UMNO who were against Lee, but also MCA led by the late Tun Tan Siew Sin. Harry
Lee was pressing Tunku for PAP to be accepted as a partner in the Alliance, meaning keeping out MCA which was unacceptable to the Tunku. Apart from the differing perception of Malaysia should be evolved, the PAP which was an urban based party was perceived by the Malayan people as a party who wants to wrest power from the Alliance so that the pace of evolution is supplanted by a much faster rate in making Malaysia follow the urban thinking of the island state.
This brash approach of making the Malayan citizens feel that Harry Lee is trying to teach our leaders how best to run the country just could not be tolerated. Perhaps if S'pore had agreed to the disengagement plan mooted by the Tunku was accepted by the Alliance Party had worked out, the ouster of S'pore could have been avoided. M'sia would have become developed much earlier should that happened, although many Malays feared their special position would be jeopardised. However there's no point crying over spilt milk.
Personally speaking, it's the differing values espoused by S'poreans as compared to Malayans at that crucial period which caused the Tunku to make such a painful decision. Now we should focus on how we could complement each other in terms of global positioning to the benefit of our national interest, and not allow petty matters to stand in the way.
Based on Comments by: Daludalu