Sir Keir Starmer should ditch his multi-billion pound surrender of the Chagos Islands and spend the money on defence instead, a former head of the Army said yesterday.
Lord Dannatt said it was ‘very hard to find good news’ in the deal, which critics say would put Britain and its allies’ security in danger.
Under the proposed treaty, Mauritius would be handed sovereignty of the archipelago despite it having never been under Mauritian control.
The UK wfould then pay at least £9billion over 99 years to lease back the Anglo-American military base on Diego Garcia, the largest of the Chagos atolls.
At present, a lease is not necessary because the archipelago is a British overseas territory.
Ministers were forced to deny that the deal could in fact be worth £18billion last month after the new Mauritian government claimed that it had squeezed more money out of Sir Keir’s government as talks stalled.
But they have refused to state publicly what the exact cost will be and have refused to rule out that the annual lease payments, £90million a year on average, are linked to inflation, which critics claim could send the cost soaring to above £50billion over the lifetime of the lease.
It comes as the Armed Forces are crying out for cash amid multiple emerging global threats and fears that US President Donald Trump may dial down military support for European forces assisting Ukraine against its Russian invaders.

Lord Dannatt (pictured) said it was ‘very hard to find good news’ in the deal, which critics say would put Britain and its allies’ security in danger.

The Chagos Islands comprises of a group of seven atolls comprising more than 60 individual islands
Sir Keir is refusing to set out a timeline for spending 2.5 per cent of GDP on defence and there are fears the target may be pushed past 2030 amid the soaring cost of borrowing following Chancellor Rachel Reeves’ disastrous budget. The UK currently spends 2.3 per cent of GDP on defence.
Lord Dannatt, a former Chief of the General Staff, said: ‘Frankly, £18billion is a lot of money.
‘And if we think we can find £18billion to buy off Mauritius, frankly, there are much better uses for that £18billion, not the least of which is on the Army and on UK defence to spend on things that really matter to us.
‘So whichever way you look at it, it’s very hard to find good news in this deal.’
Referring to the fact that Mr Trump is considering vetoing the deal because Mauritius is an ally of China, who it is feared may use the transfer of power to spy on Western military operations at the base, he added: ‘No wonder President Trump is concerned, indeed, to the point of being angry with Britain.
‘And I just can’t see why Keir Starmer’s government really continues going down this track.
‘It’s not, frankly, in our interest. It’s not in Americans’ interest, it’s not in the wider security interests of the West.’
He said the 99-year lease may not be long enough and that formally giving the Chagos Islands to the US instead is something which should be ‘explored’.
In October, the Government announced it would surrender the British Indian Ocean Territory to Mauritius.
This was after a ruling from the International Court of Justice stating that Britain might be breaching international law if it does not cede control.
However, critics point out that the ruling was a non-binding advisory opinion and say that the Government should ignore it if it is not in our interests.
Lord Hermer, Sir Keir’s chief legal adviser, who has been at the centre of a series of controversies after acting for former Sinn Fein leader Gerry Adams and Jihadi bride Shamima Begum, is understood to back the move.
It came as Lord McDonald of Salford, a former Head of the Diplomatic Service at the Foreign Office, claimed Britain might have to press ahead with a deal.
He said: ‘There was a long discussion about whether we should play along with a process at the International Court of Justice. And we succeeded in deferring or deflecting that for quite a long time, but in the end we decided to engage.
‘And I think that is a crucial fact. But once you have decided to engage in a legal process, you can’t then walk away from it when you don’t like the result.’
The crossbench peer and career diplomat, who claimed it ‘was a good day’ when former PM Boris Johnson resigned, added: ‘The agreement on the table protects our interests.
‘Many people claim that this is opening the door to China whilst giving no evidence that it’s opening the door to China…Mauritius’ orientation is much more pro-Indian than pro-China.’