The Prime Minister has been told by Labour MPs to jettison his deal to cede the Chagos Islands to Mauritius.

The plan was to transfer sovereignty of the Indian Ocean archipelago, while maintaining control of the US-UK Diego Garcia military base on a lease agreement for 99 years at an average cost of £101million per year.

The proposal was initially supported by Donald Trump, but the US President changed his stance in January after warning it was an 'act of great stupidity'.

While it has already been confirmed that the plans will not appear in the King's Speech, there is now pressure from the Labour backbenches to kill off the deal entirely, it is reported. 

That would represent an additional blow for Keir Starmer, who has already faced a chorus of mockery for pausing the surrender of the Chagos Islands in the wake of deteriorating relations with Donald Trump and his White House team.  

Dan Carden, MP for Liverpool Walton and leader of the Blue Labour parliamentary caucus, said: 'It's clear the US administration doesn't support the Chagos deal, and the government should make the best of a bad situation and finally drop it.'

Graham Stringer, MP for Blackley & Middleton South in Greater Manchester, who has previously spoken out on Government plans to put asylum seekers in new council homes, added: 'The government should ditch this financially and militarily unjustifiable policy. 

'Hanging on will just lead to further embarrassment for our country.'

It is believed that other Labour backbenchers are of the same opinion and have urged Sir Keir to drop the policy.

There is reportedly widespread concern that the policy is a vote-loser at a time when the Labour Party already faces a potential wipeout in the upcoming May local council elections. 

The Government's much-scrutinised decision to cede Chagos was intended to secure the long-term security of the joint UK-US military base on Diego Garcia - the biggest island in the archipelago. 

Officials concluded that without handing over the territory to Mauritius, the military site's future would be 'inoperable' due to a series of legal rulings. 

Mauritius' claim to Chagos, which are 5,799 miles (9,332km) south-east of the UK, is based on a number of United Nations judgments which focus on the illegality of separating the islands from Mauritius when it was still a British colony.

In 2019 that legal position was firmed-up by an 'advisory opinion' by the UN's International Court of Justice (ICJ), later cemented by a ruling of the Special Chamber of the International Tribunal for the Law of the Sea.

With the possibility of these rulings becoming legally binding in the near-future, the Government decided that retaining the Chagos Islands posed a larger threat to UK security than ceding the territory - minus the crucial Diego Garcia base. 

Defence Secretary John Healey told MPs on May 22, 2025: 'Without this deal, within weeks, we could face losing legal rulings and within just a few years the base would become inoperable.'

Mr Trump, once supportive of the deal which would see the UK pay up to £101million a year to lease Diego Garcia, changed his mind after relations soured between the two allies over the Middle East.

In recent weeks, after Sir Keir refused allow US forces to use Diego Garcia or any UK airbases for the initial raids on Iran due to doubts about the legality of the strikes, the US President said he was 'very disappointed' by the 'very woke thing'.

The former head of the diplomatic service said on Saturday that the Prime Minister had 'no choice' but to abandon his plan to hand over the Chagos Islands in the face of an 'openly hostile' Mr Trump.

Simon McDonald, who was in charge at the Foreign and Commonwealth Office when the UK was advised to hand back the Indian Ocean island archipelago to Mauritius, said the plans would now go 'into the deep freeze'.

Lord McDonald said: 'The UK had two objectives. One was to comply with international law. The second was to reinforce the relationship with the United States.

'But when the President of the United States is openly hostile, the Government has to rethink.'

However, despite hostility to the Chagos plans from within the Labour ranks,  ministers such as Health Secretary Wes Streeting insist the proposals have not been ditched and say that a deal could still be resurrected. 

Mauritian Foreign Minister Dhananjay Ramful has pledged to 'spare no effort' to regain control of the islands, after Starmer's decision to shelve the legislation. 

'We will spare no effort to seize any diplomatic or legal avenue to complete the decolonisation process,' he told a conference this week.