Sir Keir Starmer has shelved his Chagos Islands deal amid worsening relations with Donald Trump after the US failed to formally confirm its approval.
Trump had urged Starmer to scrap the deal despite earlier expressing support for the treaty. In January, the president called the plan an “act of total weakness”.
UK government officials have said they are not entirely abandoning the agreement, which would hand sovereignty of the British territory to Mauritius, but have run out of time to pass legislation before Parliament is prorogued in the coming weeks.
However, a new Chagos bill is not expected to feature in the King’s Speech in mid-May.
It is understood that the UK has still not received a formal exchange of letters from the US – a legal necessity required for the treaty to be enacted.
The Chagos Islands – officially known as the British Indian Ocean Territory – are located in the Indian Ocean, and Britain has controlled them since the early 19th Century.
The deal would see the UK cede sovereignty of the territory to Mauritius, and pay an average cost of £101m ($136m) a year to lease back a joint UK-US military base on the largest island, Diego Garcia.
A government spokesperson said: “Diego Garcia is a key strategic military asset for both the UK and the US.
“Ensuring its long-term operational security is and will continue to be our priority – it is the entire reason for the deal.
“We continue to believe the agreement is the best way to protect the long-term future of the base, but we have always said we would only proceed with the deal if it has US support. We are continuing to engage with the US and Mauritius.”
The UK had been in the process of passing legislation to enshrine the Chagos deal into law. The bill was in the final stages of its passage, but officials say time has now run out.
Conservative Party leader Kemi Badenoch said on Saturday her party was “really pleased” the deal had been shelved.
“That deal should never have been on the table,” she told reporters in London. “Paying £35bn to give away territory we already own, at a time when so many people in this country are dealing with the cost of living, shows [the government] were not in any way thinking clearly.”
Asked if she thought the US President would think more favourably of Starmer as a result, Badenoch responded: “It’s not really about what Donald Trump thinks, it’s about what is right for the British national interest. Giving away the Chagos Islands was wrong for the British national interest.”
Meanwhile, former Foreign Office permanent secretary Lord Simon McDonald told the BBC’s Radio 4 Today programme that the government had “no other choice” than to shelve the deal.
“The UK had two objectives, one was to comply with international law, the second was to reinforce the relationship with the United States,” he said.
“When the president of the United States is openly hostile, the government has to rethink, so this agreement, this treaty will go into the deep freeze for the time being.”
In February, the government denied the deal had been paused, just hours after a minister told MPs in Parliament that the UK was “pausing” the process of passing the bill.
The deal was signed in May 2025 and welcomed by the US, but in early 2026 Trump went on to criticise it and call it an “act of total weakness”.
The deal was further thrown into doubt in February when Trump posted on his Truth Social platform urging Sir Keir to not “give away Diego Garcia” and called the deal “a blight on our great ally”.
The comments came despite the US Department of State giving its official backing to the UK government’s plan a day earlier.
Many Chagossians see the deal as a betrayal and want to see the UK retain sovereignty over the islands so they can one day return to their homeland.
The attorney general of Mauritius, Gavin Glover, said the UK announcement “doesn’t surprise us”, adding the “deteriorating relationship” between Sir Keir and Trump “lies at the heart of the problem”.
He said the decision “doesn’t mean that the bill cannot be brought back to Parliament”, adding the US and UK will need to reach an agreement and Mauritius hopes to have “greater clarity in the coming months”.
Reform UK – who had previously heavily criticised the deal – welcomed the deal being shelved.
Reform UK leader Nigel Farage said: “This is great news and long overdue. Now the government must right a terrible wrong and help the Chagossians to fully resettle their home.”
And Liberal Democrat foreign affairs spokesman Calum Miller said: “The handling of the Chagos deal has been totally shambolic – from its start under the Tories to this point under Labour.
“But Trump’s fickle approach shows just how unreliable he is.
“We had a strong, stable and effective military partnership with the US. Trump has gravely endangered that.
“Any deal must provide clarity on the future military partnership with the US and address Chagossian rights and Parliamentary scrutiny of the sums involved.”
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