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 dissolved in the coming weeks.

It is understood 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.

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. Both the Conservatives and Reform UK - who have both previously heavily criticised the deal - have welcomed the deal being shelved.

Conservative leader Kemi Badenoch said: "If Keir Starmer's Chagos surrender now finds its rightful place - on the ash heap of history - it will be because Conservatives led the fight against it from day one.

"That it took so long is another damning indictment of a prime minister who fought to hand over British sovereign territory and pay £35bn to use a crucial military base which was already ours. "Unlike Labour, we will always put our country first. We are the only party who can be trusted to stand up for Britain's interests abroad. "

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

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