REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


To the General Partners
of Special Situations Fund III, L.P.


In planning and performing our audit of the financial statements of Special
Situations Fund III,
L.P. (the ?Fund?) as of and for the year ended December 31, 2006, in
accordance with the
standards of the Public Company Accounting Oversight Board (United States),
we considered
its internal control over financial reporting, including control activities
for safeguarding securities,
as a basis for designing our auditing procedures for the purpose of
expressing our opinion on the
financial statements and to comply with the requirements of Form N-SAR, but
not for the
purpose of expressing an opinion on the effectiveness of the Fund?s internal
control over
financial reporting.  Accordingly, we express no such opinion.

The management of the Fund is responsible for establishing and maintaining
effective internal
control over financial reporting.  In fulfilling this responsibility,
estimates and judgments by
management are required to assess the expected benefits and related costs of
controls.  A
company?s internal control over financial reporting is a process designed to
provide reasonable
assurance regarding the reliability of financial reporting and the
preparation of financial
statements for external purposes in accordance with generally accepted
accounting principles.
Such internal control includes policies and procedures that provide
reasonable assurance
regarding prevention or timely detection of unauthorized acquisition, use or
disposition of a
company?s assets that could have a material effect on the financial
statements.

Because of its inherent limitations, internal control over financial
reporting may not prevent or
detect misstatements.  Also, projections of any evaluation of effectiveness
to future periods are
subject to the risk that controls may become inadequate because of changes in
conditions, or that
the degree of compliance with the policies and procedures may deteriorate.

A control deficiency exists when the design or operation of a control does
not allow management
or employees, in the normal course of performing their assigned functions, to
prevent or detect
misstatements on a timely basis.  A significant deficiency is a control
deficiency or combination
of control deficiencies, that adversely affects the company?s ability to
initiate, authorize, record,
process or report external financial data reliably in accordance with
generally accepted
accounting principles such that there is more than a remote likelihood that a
misstatement of the
company?s annual or interim financial statements that is more than
inconsequential will not be
prevented or detected.  A material weakness is a significant deficiency, or
combination of
significant deficiencies, that results in more than a remote likelihood that
a material misstatement
of the annual or interim financial statements will not be prevented or
detected.

Our consideration of the Fund?s internal control over financial reporting was
for the limited
purpose described in the first paragraph and would not necessarily disclose
all deficiencies in
internal control that might be significant deficiencies or material
weaknesses under standards
established by the Public Company Accounting Oversight Board (United States).
However, we
noted no deficiencies in the Fund?s internal control over financial reporting
and its operation,
including controls for safeguarding securities, that we consider to be a
material weakness as
defined above as of December 31, 2006.

This report is intended solely for the information and use of management and
the General
Partners of Special Situations Fund III L.P. and the Securities and Exchange
Commission and is
not intended to be and should not be used by anyone other than these
specified parties.


WEISER LLP

New York, N.Y.
February 27, 2007