In 1902 a fourth function was added, the Trade Division, which was created for matters relating to the protection of merchant shipping.

The Trade Division was abolished in October 1909 in the wake of the Committee of Imperial Defence inquiry into the feud between the First Sea Lord, Admiral Sir John Fisher and former Commander-in-Chief Channel Fleet, Admiral Lord Charles Beresford, when it was discovered that the captain heading the Trade Division had been supplying the latter with confidential information during the inquiry.

[5] Following restructuring the NID was relieved of its responsibility for war planning and strategy when the outgoing Fisher created an Admiralty Navy War Council[6] as a stop-gap remedy to criticisms emanating from the Beresford Inquiry that the Navy needed a naval staff, a role the NID had been in fact fulfilling since at least 1900, if not earlier.

After this re-organisation, war planning and strategic matters were transferred to the newly created Naval Mobilisation Department (NMD), and the NID reverted to the position it held prior to 1887, an intelligence collection and collation organisation,[7] but its director remained one of the First Sea Lord's principal advisors.

[8] In 1911, Winston Churchill, the First Lord of the Admiralty, communicated to the Prime Minister that the Admiral of the Fleet was opposed to any formation of a new naval staff, and because of this he insisted that he be relieved of his duties by January 1912.