Labour has been forced to deny that the Chagos Islands deal will cost more than £9 billion after claims inflation drove the price up.
Mauritian Prime Minister Navin Ramgoolam claimed inflation would hike the cost to more than the £8.9 billion originally planned.
Currently, the deal involves giving away the islands but leasing the Diego Garcia air base for £90 million a year for 99 years, previous reports said.
However, Mr Ramgoolam said this could would increase each year for the next 10 years as he’d struck an inflation-linked deal with the Government.
He added: “The previous package was very badly negotiated. It seems somebody who didn’t know that inflation existed. [The deal] has to be inflation-proof. What’s the point of getting money and then having half of it by the end?”
This prompted the Foreign Office to step in, calling Mr Ramgoolam’s claims “inaccurate and misleading”, with a spokesperson telling the BBC “the UK will only sign a deal that is in our best interest”.
They maintained: “There has been no change to the terms of extension in the treaty.”
Progress on the Chagos deal has slowed since Donald Trump was consulted on it, despite previous efforts to get it signed before he was sworn in in January.
Since then, the Government said it was “perfectly reasonable for the US administration to consider the detail” of an agreement.
Senior members of Mr Trump’s administration have raised alarm bells that giving back the islands could strengthen China’s prowess in the Indian Ocean while weakening the West’s.
The Chagos deal has also faced opposition from Shadow Foreign Secretary Dame Priti Patel, who said it disregarded national security.
She said: “It seems Keir Starmer has learnt absolutely nothing – and is still putting his leftie shame of our country’s history over our national security, and our longstanding relationship with our closest ally.
“He has the audacity to tell the British people they will foot the bill and pay for the indignity of his surrender of the Chagos Islands, as he isolates the new US administration by bending the knee to Mauritius and emboldening our enemies with his disastrous surrender deal.
“Starmer and David Lammy must urgently explain their epic failure of diplomacy which is putting out special relationship at risk while they play pathetic gesture politics.”
