Since Posts S8 and S9 did not have to be recaptured, a new plan was prepared for the attack by the 2/23rd Battalion, starting on 17 May 1941. The plan still included taking Posts S7 and S6. They expected to be able to capture those posts and the new plan included pushing forward to attack and take Posts S5 and S4. Brigadier Wooten, the 18th Brigade commander, approved of the plan, as did Colonel Lloyd, General Morshead's "most senior staff officer". The attack would be conducted by two companies with supporting infantry tanks. Artillery support would be provided by the 2/12th Field Regiment, which had just arrived at Tobruk. The start time would be at 5:30am. The attackers were supported by machine guns, as well as the artillery. Smoke had been laid down at Medauuar. The visibility was made worse by the smoke from the German artillery fire. In the reduced visibility, the tanks with the right-most company got confused and then lost. The infantry lost their tank support. The tanks ended up at Post S9, instead of being 750 yards forward.
The company that had lost its tank support now was taking casualties from 88mm guns firing air burst over the men. The other platoon that was directed at Post S7 overran the post from the right side. The situation became increasingly desperate and casualties mounted. They had lost communication with the battalion and could not call up the reserves to help.
Post S6 was taken. They captured 19 Germans from the post. They left a garrison in S6 and then pressed forward to Post S4. They succeeded in overrunning Post S4 with a hard fight. Most of the enemy troops were killed in hand-to-hand fighting. They left a small garrison in Post S4 and then pulled back to S6. They fired a signal flare that was not seen by the battalion commander. The men in Post S6 were forced into a more defensible stone structure nearby. A carrier brought ammunition and supplies forward to the men near Post S6. Another carrier sent to Post S4 were not able to reach the post. One group attacked sangers held by the enemy. They ended up being surrounded and captured.
Lt-Col. Evans, the 2/23rd Battalion commander, did not have good information about what had happened in the attacks. By 7am, he had an incomplete story about the results. With four infantry tanks in support, they were going to attack Post S7, thinking that it had not been taken in the first attacks. This group started moving at 7:40am. The enemy fired on the attacking forces and laid smoke. Again, the tanks did not go where they had been planned to go. The tanks had turned to the right when they were within 100 yards of Post S7. The infantry with the tanks followed them in the wrong direction. The infantry could see enemy tanks approaching, but the infantry tanks were unaware of their approach. The German tanks led and assault that recaptured Post S7 and took many Australian prisoners in the area. This is based on the account in Vol.III of the Australian Official History.