The Ambassador is correct and it is his duty to inform Whitehall of the situation in the United states.
These memos should not have been leaked, and whoever leaked them needs to be sacked, arrested, prosecuted and jailed for breaching the Official Secrets Act. Diplomats should be able to send cables to the government that they serve in the confidence that they will only be seen by people who need to know and can be trusted to keep them confidential.
That said, now that his opinions have been exposed, his position is untenable. He needs to be removed and either pensioned off or sent to another ambassadorial post somewhere else. He is a liability to UK/US relations regardless of the dirty and underhanded way he has been turned into a liability.