Downing Street has been accused of delaying the surrender of the Chagos Islands for fear of a backlash from Labour MPs.
Ministers declared at the start of April that a controversial deal to hand the Indian Ocean territory to China ally Mauritius was being finalised.
It was widely thought there were no more hurdles to clear after Donald Trump said he had no objections to the handover despite one of the atolls, Diego Garcia, being home to a crucial Anglo-American military base.
Yet No 10 admitted yesterday that talks are still ongoing, amid suspicions that the final sign-off has been put back because the estimated £9billion price tag will prove politically toxic at a time when Labour MPs are being told to vote for massive welfare cuts.
A source told The Times: ‘They know that they’re going to be attacked by the Tories and Reform for giving up sovereignty of the Chagos Islands but it makes it much worse if they’re also being attacked from their own side.’
The Prime Minister’s spokesman said: ‘The work continues to deliver a deal over the Diego Garcia military base.’
Last night Shadow Foreign Secretary Dame Priti Patel said: ‘When Labour negotiates, Britain loses.
‘Labour are failing Britain and are not serving the national interest.’
Earlier this year leading Tory peers issued a pre-action legal letter against the Foreign Office seeking a judicial review of the controversial proposed deal.
The group, which included Lord Lilley, the former Cabinet minister, Lord Kempsell, a former special adviser to Boris Johnson, and Lord Roberts of Belgravia, the historian, claimed that the Government is acting unlawfully by proposing to give away British territory to Mauritius.
They argued that ministers do not have the prerogative power to cede British territory to a foreign power, that the cost of around £8.9billion is unlawful and that any legislation to underpin the deal is based on an ‘erroneous’ understanding of international law.
However, there is a long-standing unwritten convention that the courts do not get involved in foreign policy decisions, meaning it is unlikely the judicial review will be heard.
Some high-profile lawyers, including former attorney-general Sir Michael Ellis, have previously warned that the proposed deal is flawed and therefore could be challenged in the courts.
Under the proposed treaty, Mauritius would be handed sovereignty of the archipelago.
The entire population of the Chagos islands were forcibly removed by the United Kingdom between 1968 and 1973 to allow for a US military airbase on the largest island, Diego Garcia.
There are now more than 10,000 Chagossians spread evenly between Mauritius, the Seychelles and the UK.
In March 2025, two Chagos-born women announced they were bringing legal action against the Foreign Office in order to try and keep the islands as a UK territory.
Bernadette Dugasse and Bertrice Pompe, who were both born on Diego Garcia, the largest island of the Chagos Archipelago, launched legal action to contest the transfer agreement between the two nations.