The United Kingdom is set to sign a historic and controversial agreement to transfer sovereignty of the Chagos Islands to Mauritius on Thursday, after Downing Street lifted its months-long objections to announcing the deal. As reported by the Financial Times, the long-anticipated handover, entangled in political delays in London, Washington, and Port Louis, will go ahead after receiving the green light from both U.S. President Donald Trump and UK Prime Minister Sir Keir Starmer.
Under the terms of the agreement, Britain will relinquish its claim to the Chagos archipelago—officially known as the British Indian Ocean Territory—but will lease back the island of Diego Garcia for 99 years. Diego Garcia, the largest island in the group, is home to a critical U.S.-UK military base and holds immense strategic value for operations across the Indian Ocean and beyond.
Although ministers have not disclosed the final cost of the arrangement, insiders believe the UK will pay Mauritius approximately £90 million per year—adjusted for inflation—over the duration of the lease. This estimate is based on the rent paid by the U.S. for other overseas bases, such as Camp Lemonnier in Djibouti.
The deal had been finalized months ago but was politically frozen over fears of backlash after Labour’s poor performance in the recent local elections. Aides close to Starmer were reportedly concerned about agreeing to major overseas payments at a time when the government is facing criticism for domestic welfare cuts and resistance to expanding winter fuel payments.
Senior officials from the Foreign Office and Starmer’s national security team had pushed for the deal to be signed, citing international legal obligations and the importance of maintaining strategic access to Diego Garcia. The impasse was broken only recently, following Starmer’s U-turn on winter fuel payments and ongoing diplomatic momentum following a post-Brexit rapprochement with the EU.
Despite being initiated under the previous Conservative government, the agreement has been fiercely opposed by current Conservative leaders. Kemi Badenoch, leader of the Conservative Party, criticized the plan, saying, “It is not in our national interest to give [the islands] away and pay for the privilege of doing so.” Priti Patel, the shadow foreign secretary, called it “a betrayal of our national interest” and accused Starmer of “humiliating” Britain on the eve of Parliament’s summer recess.
Nigel Farage, leader of Reform UK, went further, arguing that the UK should cede the territory directly to the United States rather than “corrupt Mauritius,” warning that the arrangement jeopardizes global security and places a further burden on British taxpayers.
The treaty will be introduced to Parliament under the Constitutional Reform and Governance Act 2010, which provides a narrow 21-day window for MPs or Lords to formally object. If neither house blocks the treaty, it will be automatically ratified.
From Washington, the response has been notably restrained. President Trump, who hosted Starmer at the White House in February, expressed support for the deal, a signal seen as pivotal to moving the agreement forward. A White House official told the Financial Times, “President Trump discussed this with PM Starmer during his visit. The United Kingdom is proceeding with the deal.”
The agreement also comes after a change in leadership in Mauritius. While former Prime Minister Pravind Jugnauth led the initial negotiations, his successor Navin Ramgoolam initially expressed skepticism about the deal. Negotiations were further delayed during the U.S. presidential transition, as diplomats waited for confirmation of Trump’s support.
Despite domestic controversy, officials in both London and Washington appear committed to ensuring that military operations from Diego Garcia remain uninterrupted, even as the sovereignty of the broader archipelago transitions to Mauritian control.
