At 08:00 on Thursday morning, the Germans began a concentrated attack on the 1st Airborne positions. The most damaging incident took place around the Westerbouwing Restaurant, situated on the high ground in the extreme south-west of the Perimeter, which was defended by "B" Company of the 1st Border (Map Ref 22). The Company was taken unawares by several tanks and an infantry battalion of the Hermann Göering Schule Regiment, however the forward platoon was able to cut down a high number of the attacking infantry until their only Bren gun jammed and they were compelled to fall back. The two platoons on the flanks put up equally fierce resistance until they were overwhelmed and the majority taken prisoner. The surviving members of the Company abandoned the Restaurant but halted the pursuing tanks with a hard fought rearguard action. The 1st Border made three attempts to retake this pivotal high ground but failed to do so.
The loss of this position meant that the Driel-Heveadorp ferry crossing, which the Poles had intended to commandeer later in the day, was now in German hands. In addition, the base of the Perimeter along the Rhine had been reduced to a mere seven hundred yards, less than half of its original length. This placed the entire Division in jeopardy as they would surely be defeated if forced away from the riverbank. This dire prospect was made safe, however, by Major Charles Breese, who reorganised the survivors, amounting to an under-strength platoon, into what became known as the Breeseforce, and placed them in a firm defensive position (Map Ref 23) which the Germans were very reluctant to challenge for the remainder of the Battle. The Breeseforce also consisted of two depleted platoons of "A" Company, No.17 Platoon of "C" Company the 2nd South Staffords, and a small force of paratroopers.
The other companies of the 1st Border were also heavily engaged on Thursday, beginning with the heavy mortaring of "A", "C" and "D" Companies. In the north-west, "A" Company (Map Ref 16) were thrice attacked by infantry during the day and again at night, by which time their ammunition was nearly spent and so they held their fire until the enemy was just 30 yards from their positions, whereupon they inflicted heavy casualties and broke up the attack. In the centre of the Battalion's position, "C" Company (Map Ref 20) were similarly assaulted from their front, however their position became unstable when an enemy platoon attempted to turn their left flank with the support of a machine-gun. Corporal Swan, acting on his own initiative, immediately counterattacked this force with bayonets and grenades, killing many of them and putting the remainder to flight.
"D" Company, neighbouring Westerbouwing (Map Ref 21), suffered heavily under the mortar bombardment and again when two tanks approached their positions and raked their trenches with machine-gun fire. The Company's anti-tank guns had difficulty engaging either of them as they could not acquire an unobstructed line of sight, however, when a corporal in one of the crews was killed, his colleagues were so incensed that, when the offending tank broke cover, they destroyed it by firing six shots in quick succession; they practically had to be dragged from the gun to cease firing. One worrying aspect of the 1st Border's position, particularly around "C" and "D" Companies, was that their area was so open to enemy observation that relocating their positions was difficult, and burying their dead and evacuating wounded was, in many cases, impossible.
The Eastern Perimeter defences closest to the Rhine were also challenged. During the morning, German infantry put in an equally hard attack on the Lonsdale Force (Map Ref 2) but they were quickly and bloodily repulsed by small-arms fire and the guns of the Light Regiment. Thereafter the Germans heavily shelled the area and caused a number of casualties amongst the artillerymen; their commander, Lieutenant-Colonel Thompson, was wounded during this bombardment. Tanks resumed the offensive in the afternoon but were similarly beaten off. Major Cain, now commanding the 2nd South Staffords, was pivotal in this action, and his bravery under fire resulted in him being awarded the Victoria Cross; the only man at Arnhem to receive it and survive.
Further north, the 10th Battalion (Map Ref 6) suffered similar attacks from along the Utrechtseweg, which they were initially able to resist. Eventually a self-propelled gun was brought to bear and the paratroopers found it extremely difficult to deal with this menace as it proceeded to fire repeatedly into the occupied buildings, causing significant casualties amongst the defenders. German infantry exploited the gaps and slowly began to evict the 10th Battalion from their positions, with hand-to-hand fighting frequently taking place. During this period most of the Battalion was overrun and all of its officers were lost, including their commander, Lieutenant-Colonel Smyth, who was fatally wounded. Nevertheless, isolated pockets of resistance, under the command of Captain Barron of the 2nd Airlanding Anti-Tank Battery, were able to hold out until Brigadier Hackett was able to send in the 21st Independent Parachute Company to relieve them on the following day. Thereafter the remnants of the 10th Battalion were withdrawn into reserve. Despite their success, the Germans gained very little ground as a result of this action.
The final major attack of Thursday took place on the northern-most positions around the Dreyeroord Hotel (Map Ref 11), known to the 7th KOSB who defended it as the White House. Throughout the day, the Germans consistently harassed the three hundred men in this area, though they were thrown off-balance in the morning when two of the Borderers' platoons attacked three enemy machine-guns and a group of infantry. The attack was a success, albeit a particularly costly one, with one platoon assaulting from the front and the other from the rear, having managed to work its way around the position.
The German pressure continued and culminated in determined infantry assault at 16:30. The attack cut deep into the Borderers' defences, but was brutally driven back by two bayonet charges, the first organised and led by Lieutenant-Colonel Payton-Reid, the second by the Canadian, Lieutenant Taylor, and his No.12 Platoon. All of the lost territory was retaken and the ground around the Hotel was littered with an estimated one hundred German dead, but half of the Borderers became casualties as a result of the action, so many that the position was now deemed indefensible. After the wounded were evacuated, the Battalion withdrew to a more compact position further south (Map Ref 11a), and Major-General Urquhart ordered the other now exposed units in the north, the Independent Company and part of the 4th Parachute Squadron (Map Ref 12, 13 and 14), to leave their positions and come into reserve.
It had been a hard day of fighting, but with the exception of the German victory over the 1st Border at Westerbouwing (Map Ref 22), the shape of the Oosterbeek Perimeter remained largely unaltered and its defences were firm. German casualties had been particularly heavy for so little gain, and this disappointment led them to adopt a far more cautious attitude over the coming days. British casualties had also been high with some one hundred and fifty men dead or dying as a result of the day's actions.
Thursday also saw the most costly re-supply drop of the battle. One hundred and seventeen Stirlings and Dakotas flew to Arnhem, however their fighter escort was sparse as many US fighters had been held back to accompany a major bombing raid taking place later in the day, whilst the RAF were grounded by dismal weather conditions. Anti-aircraft fire was as intense as ever, but it was one of the great tragedies of the battle that, despite almost complete Allied air superiority, German Me109 and Fw190 fighters managed to avoid the few escorting fighters to tear into the slow and unprotected supply aircraft. Twenty-nine were shot down, a quarter of those taking part. 190 Squadron suffered particularly harshly, with seven of its ten Stirlings lost. Again, the majority of the supplies dropped fell into German hands.
It had been a grim day for all concerned, but the 1st Airborne Division had one cause for cheer; during the morning, radio contact had at last been made with XXX Corps and it would endure until the end of the Battle. The 1st Airborne's Headquarters Royal Artillery was in direct contact with the 64th Medium Regiment, one of the ground artillery units in support of the Division. The Light Regiment at Oosterbeek was running dangerously low on ammunition, but the addition of this plentifully-equipped Medium Regiment proved pivotal in the coming days. Their extremely accurate fire was brought down on areas very close to the British positions, and on one occasion actually inside the Perimeter, to break up a group of infiltrating German infantry. It is widely accepted that without the assistance of these guns, the Oosterbeek Perimeter would not have stood for as long as it did.