VH-EWS was departing from runway 16 at Sydney for Hamilton Island, followed shortly after by VH-YMK for Perth. The DEPARTURE Radar Controllers on duty at the Sydney Area Approach Control Centre (AACC), believed that a breakdown in the radar separation standard had occurred between the two aircraft shortly after take-off. The initial DEPARTURE instructions given to the Sydney Control Tower for VH-YMK were 'Cancel SID turn right heading 170 maintain 3 000'. The DEPARTURE sequence was subsequently changed twice with two aircraft VH-HVA and VH-EWS sequenced ahead of VH-YMK. Immediately following the issue of the final DEPARTURE instruction for VH-EWS, the instruction 'and YMK can be unrestricted' was passed by DEPARTUREs to the Tower. The Tower understood the instruction to mean cancel the previous DEPARTURE instruction, and the aircraft may now track via the cleared SID with no altitude restriction. The