The two ways of relating what a person has said are 1)direct and 2)indirect (reported).

In the direct speech, the exact words of the original speaker are repeated.

In the indirect speech (reported speech), the exact meaning of what the speaker told is expressed but not necessarily in the speaker’s exact words.

Option D is correct as the sentence in the inverted commas is in the simple present tense and that's why 'let' is not used.

Options  A, B, and C are wrong as 'said', 'told' cannot be used, and 'let' should not be used respectively.

The correct answer is D) He proposed that the sweets be distributed among the children.