Legislation which would see the UK hand over the Chagos Islands to Mauritius has been shelved after Donald Trump withdrew support for the agreement, branding it an “act of great stupidity”.
The Bill underpinning the agreement would have enabled a £35bn plan to transfer sovereignty of the Chagos Islands to Mauritius, while securing a 99-year lease allowing Britain to continue operating the UK–US base on Diego Garcia.
The £35bn estimate represents the projected cost of leasing Diego Garcia over decades, including inflation and additional commitments, rather than a one-off payment or legally fixed amount.
The Trump administration believes the UK should not give up sovereignty over Chagos because control of Diego Garcia is too strategically important to risk, even under a long-term lease.
Conservative leader Kemi Badenoch said the Mauritius sovereignty transfer agreement should now find its “rightful place – on the ash heap of history”.
The Times reported that the Diego Garcia Military Base and British Indian Ocean Territory Bill will not feature in the King’s Speech in May, which sets out the agenda for the next session of Parliament.
The Chagos decision fans growing tensions with the US – and within the UK
The collapse of the plan has exposed growing friction between London and Washington over the future of the Diego Garcia military base.
Trump has also repeatedly criticised the Prime Minister throughout the conflict in the Middle East, with the White House saying Britain and Nato allies have “turned their backs” on the American people during the Iran war.
Farage-aligned voices and Conservative critics have seized on the row, arguing that the Government has allowed the Trump administration to dictate British sovereignty decisions.
A Government source told The Times that the agreement is “the best way to protect the long-term future of the base” but they will not proceed without the backing of Mr Trump.
The strategic reality: why Diego Garcia matters
Diego Garcia is one of the most strategically significant military bases in the world and gives the UK and US rapid reach across the Middle East, East Africa, South Asia including India and Pakistan.
From this position, US and UK forces can project air and naval power across vast distances, support carrier groups, and respond quickly to crises.
The base has played a key logistical role in operations from the Gulf War to Afghanistan, and remains central to Western planning in an era of renewed instability in the Middle East, including tensions involving Iran.
Military analysts note that without Diego Garcia, Western forces would rely more heavily on regional partners such as Gulf states, East African allies, or Indian Ocean facilities which carry political and operational uncertainties.
In extreme conflict scenarios, the US and UK would still have global basing options, including facilities in Australia, Japan, the Gulf, and the US mainland, but none offer the same isolated, centrally positioned “jump point” that Diego Garcia provides.
The Chagos Islands dispute: a colonial legacy
In 1814, after the defeat of Napoleon, Britain formally acquired Mauritius and its dependent territories from France under the Treaty of Paris. The Chagos Archipelago was administered as part of Mauritius under British colonial rule.
However, in 1965, just before Mauritius gained independence, Britain detached the islands and created the British Indian Ocean Territory (BIOT). This allowed the UK and US to develop Diego Garcia as a strategic Cold War base.
Between 1968 and the early 1970s, the entire Chagossian population was removed or prevented from returning, a decision now widely condemned as a forced displacement carried out for military convenience.
Mauritius has long argued that the separation was unlawful. In 2019, the International Court of Justice (ICJ) issued an advisory opinion stating that the UK’s continued administration of the islands was inconsistent with decolonisation principles.
The ICJ decision is not legally binding, meaning the UK is not obliged in a court-enforceable sense to hand over the islands, although the advisory opinion carries strong political and moral weight.
What could happen next
The collapse of the deal leaves Britain balancing pressure to resolve a long-running decolonisation dispute with the need to secure continued access to the Diego Garcia base. Without an agreement, it faces ongoing international criticism and potential legal challenges.
Mauritius, which has strong international backing for its sovereignty claim, is likely to face further delays in regaining control of the territory.
For the United States, the priority remains uninterrupted access to Diego Garcia, with Donald Trump’s intervention highlighting how domestic politics in Washington can complicate allied security arrangements.
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