The problem with Salazar was that he was all or nothing when it came to the overseas empire. He truly believed that Portugal could not cede anything when it came to territory.
He was not alone, there were those in the regime known as the "ultras" or the hardliners of the old guard. The most important of these was the Portugal's president Admiral Américo Tomás. Before Salazar's fall from power he did not wield much authority, but after 1968 he had the final say on many of the decisions, leaving the new reform-minded Premier Marcello Caetano with little room for compromise when it came to the overseas empire. Américo Tomás was re-elected as president in 1972, but it was known that he was to announce his resignation upon his 80th birthday (November of 1974). Caetano was hoping that he could implement changes once he could get a new reform minded president elected.
There were several proposals floated within the inner circle of the government in Portugal in the early 1970s.
Firstly Portuguese Guinea was of little value and consumed the largest portion of the military budget, it also produced the largest number of casualties for Portuguese forces. In addition this was the only Portuguese territory at war where fewer than 20% of the Portuguese forces were locals. In Angola that figure was 50% and in Mozambique nearly 60% by 1974. The governor there had entered into secret negotiations with the guerrillas as early as 1972 and was in secret talks with Senegal to provide for an eventual exit.
As for Angola, it was felt that the war after 1972 had been won. The FNLA had been driven out of Northwestern Angola by 1966 and was a shell party that only had the support of Zaire's Mobuto Sese Seko. The other main independence movement, the MPLA had splintered into two rival groups in 1973 and had been driven out of Eastern Angola by the Portuguese and UNITA. UNITA was secretly working with the Portuguese to fight the MPLA in the East.
There were proposals that UNITA's leader Jonas Savimbi could be made the leader of either an autonomous part of Angola consisting of Moxico and Cuando-Cubango districts or perhaps even making this an independent state with him as leader. The goal was use this as a buffer zone between Zambia and Portuguese Angola. This buffer state would be run by UNITA and take care of any MPLA incursions. On the map below I have shown it in pink with the number 3.
Another idea floated around was to cutoff Cabinda and make it a district of Portugal since the native population did not want to be part of Angola. Cabinda had fewer than 100,000 inhabitants by 1974 of which nearly 20% were whites and mestiços. It was thought that with a little encouragement enough Portuguese could be settled so that they'd be the majority of the population. Also, Cabinda produces 2/3 of all of Angola's oil so it would have been a very lucrative area to keep.
Finally when it came to Mozambique there were various proposals. Some people said that Mozambique north of the Zambezi could be dumped since it contained few settlers and most of the wealth was in the south anyway. Also, this area had most of the native population of the country.
Some thought that perhaps Niassa district (labelled 1 on the map) could be given to Malawi so that this area at least could be part of a friendly state. Others said the 3 northern districts of Niassa, Cabo Delgado and Moçambique (Nampula) could be handed over to FRELIMO.
Densely populated Zambézia (#2 in Orange) never had guerrilla activity and its people were traditionally more conservative. It was thought that this area could go to COREMO (later RENAMO). Indeed, after independence this area was RENAMO territory.
The rest of Angola and Mozambique could have stayed Portuguese but even Marcello Caetano agreed that eventually they could become multi-racial independent countries that would be friendly with the west.
If this had been done we'd have the following in Southern Africa c1975.
Cabinda (Portuguese region)
Population 85,000 (17% White, 3% Mestiço)
Angola (Autonomous State of Portugal, eventually independent)
Population 5,400,000 (10% White, 2% Mestiço)
Kuando-Kubango (UNITA run state)
Population 400,000 (1.25% White, 1% Mestiço)
Mozambique (FRELIMO run state)
Population 3 million (1% White, 0.5% Asian and Mestiço)
Zambézia (COREMO run state)
Population 2.7 million (0.8% White, 0.4% Asian and Mestiço)
Sofala (Autonomous State of Portugal, eventually independent)
Population 4 million (7% White, 1% Mestiço, 0.5% Asian)