Response.
As soon as the British had left Dutch waters the government immediately brought the nations armed forces up to a war footing. Patrols were sent out, merchant ships were escorted in and out of the English channel. And the battlefleet was placed on high alert. In addition the army took up positions to defend the nations borders in the event of any British or French invasion. The government did not know if the battle of Texel had been an isolated incident or was a part of a larger plan and they did not want to take any chances. Feelers were also sent out to Germany to re-open talks of the Netherlands joining the Central powers. Kaiser Wilhelm accepted the Dutch proposal with glee, ordering his naval and army general staffs to begin drafting plans for Dutch integration into the greater war effort with a focus on using the Dutch navy in a battle with the Grand fleet.
Soon after the fleet returned home anti-British sentiment exploded, culminating on the 17th of July when the British embassy in the Hague was attacked by a mob. Police were called in on what soon became a riot as angry citizens shouted names at those inside. Requests by the Embassy staff for the Dutch army to protect them were met with silence. Additional anti-British riots would soon break out throughout the Netherlands as rumors spread that the British planned to invade and annex the country (Unfounded rumors started by the paper Amsterdam Heraald to sell copies) the rioters would target British businesses and citizens. Killing three and wounding dozens of others before the Dutch government was finally forced to use the army to break up the demonstrations.
On the 22nd the first draft of a German-Dutch alliance had been penned. It was soon brought before both nations governments for changes and revisions. The document promised North Belgium and the Congo free state to the Netherlands in exchange for half a million Dutch troops, vitally needed in Flanders, cooperation between the Dutch and German navies and use of Dutch ports for U-boat bases. With only minor revisions the bill was passed and went back for finalization with ratification planned for the 25th.
The day that the preliminary treaty was approved by the Staaten Generaal British intelligence services reported to the British government that "Texel seems to have convinced them of nothing but the necessity of entering the war" Belatedly the government ordered their ambassador to see what it would take for the Dutch to remain out of the war. He sent back an urgent telegram saying he could not even leave the embassy for fear of "Being set upon by an angry mob". And besides he pleaded. He had not been able to speak to anyone in the Dutch government since Texel. Now convinced that a Dutch declaration of war was imminent London ordered all Dutch shipping in the English channel and North sea stopped and that a blockade of the Dutch coast go into effect on the first of August.
At the last minute the French intervened, the prospect of facing a German army refreshed by new Dutch troops being exceedingly unappealing to Paris they asked British and Dutch representatives to meet in Toulon. Both sides agreed, neither wanting a war, and plans for ratifying the alliance with Germany were pushed back to the 30th. Queen Wilhelmina herself led the Dutch delegation feeling that the meeting was to important for anyone else to be trusted with its success. She arrived on the 25th a day ahead of the British delegation and spent the wait talking to French officials and observing hospitals crowded with wounded men.
The British arrival meant that talks could begin and tense negotiations would immediately begin with French oversight. After three days of getting nowhere Wilhelmina reminded the British that the alliance treaty with Germany was due to be ratified on the 30th. Immediately the British became more accommodating and the next day a proper agreement was reached by the two sides. Britain would take full blame for the incident, they would pay for all damages and deaths incurred by the attack. In exchange the Netherlands would cancel their alliance plans with Germany and return HMS Tiger and her crew to the British. The agreement was officially approved by London on the 30th and by the Staaten generaal the next day. The French were ecstatic while Germans were somewhat angry with the sudden reversal but realized that Dutch neutrality had its benefits and the German ambassador was heard to say that it was for the best even as the flow of goods past the British blockade could continue.
News of the Toulon agreement sent relief throughout the Netherlands. Most had been quite angry with the British for their attack, but were unwilling to die to see the British suitably punished. Those that were willing to die to punish the British would volunteer in the German army. Serving in one of a total of six all Dutch regiments in such massive battles as Verdun, the Marne and Ardennes forest before returning home at the end of the war. In Britain the news of the agreement was not met with such approval, many Britons felt that the Dutch had humiliated British pride by daring to defy the might of the RN. And making any sort of accommodation with them was seen as unacceptable. However most also agreed that the no real harm had been done to either the RN, or the war situation and that it was best not to pursue the matter further.