Sir Keir Starmer is due to sign a deal handing the Chagos Islands to Mauritius on Thursday.
Under the terms of the deal Mauritius would gain sovereignty of the islands from the UK, but allow the US and UK to continue operating a strategically important military base on one of the islands for an initial period of 99 years in exchange for a multi-billion pound payment.
As first reported in The Telegraph newspaper, the prime minister will attend a virtual signing ceremony with representatives from the Mauritian government on Thursday.
The deal previously appeared to have stalled after a change in government in both Mauritius and the US – where aides to Donald Trump were given time to examine the plan.
The plan to hand over control of the Chagos Islands, officially known as the British Indian Ocean Territory (BIOT), was announced last October following negotiations with then-Mauritian leader Pravind Jugnauth.
However, following elections, he was replaced by current PM Navin Ramgoolam, who expressed concerns about the deal.
Progress on the deal was also delayed after the election of Trump because negotiators wanted to give the new US administration time to examine the details of the plan.
US Secretary of State Marco Rubio was one of a chorus of high-profile Republicans who said the deal posed a “serious threat” to US national security, due to Mauritius’ relationship with China.
However, last month Trump indicated he would back the deal.
Under the terms of the deal, Britain is expected to give up sovereignty of the island territory to Mauritius, and lease back a crucial military base on the archipelago for 99 years.
The government is yet to spell out the estimated cost of payments the British taxpayer will make under the deal, but it is expected to run into the billions.
The Chagos Archipelago was separated from Mauritius in 1965, when Mauritius was still a British colony.
Britain purchased the islands for £3m, but Mauritius has argued that it was illegally forced to give away the Chagos Islands as part of a deal to get independence from Britain in 1968.
The UK has come under increasing international pressure to hand over control of the archipelago after various United Nations bodies sided with Mauritian sovereignty claims in recent years.
The last Conservative government opened negotiations over the legal status in late 2022, but has since criticised the Labour government for being willing to hand over the islands.
Reform UK has been strongly critical too.
Labour has argued that the best way to guarantee the future of the military base was to do a deal with Mauritius – and that that was in the interests of UK national security too, given the importance of the base.
Following the signing ceremony, MPs will be updated on the terms of the deal in the House of Commons, which could include scope for a 40-year extension to the lease of the military base, the Telegraph said.
Speaking in the House of Commons just this week, Defence Secretary John Healey insisted the base on Diego Garcia was “essential to our security”, and the UK’s security relationship with the US.
“We’ve had to act, as the previous government started to do, to deal with that jeopardy, we’re completing those arrangements and we’ll report to the House when we can,” he added.
