Britain has put planned payments to Mauritius on hold and will rework its Chagos Islands agreement after US President Donald Trump renewed his opposition to the deal governing the strategically important US-UK military base on Diego Garcia.

Defence Secretary Wes Streeting said the agreement in its current form could not proceed without Washington's backing. Annual payments worth at least £120 million will not be made “at this stage”, he said.

“This deal as it is currently constituted can’t go ahead without American support,” Streeting told BBC Radio 4, saying Britain would have to work with the Trump administration and Mauritius to find terms all three could support.

The announcement followed Trump’s first face-to-face meeting with British Prime Minister Andy Burnham on the sidelines of the UN General Assembly in New York on Tuesday. Trump described the Chagos agreement as “terrible” and stressed the strategic importance of Diego Garcia.

“I don’t support it. I think it’s a terrible deal,” Trump said. Burnham later said Britain would work towards a resolution and expressed confidence that an agreement could be found with the United States.

The treaty, signed by Britain and Mauritius on 22 May 2025, would recognise Mauritian sovereignty over the entire Chagos Archipelago, including Diego Garcia, while authorising Britain to exercise the rights needed to operate the base jointly with the United States. The treaty has been signed but has not entered into force.

It provides for an initial 99-year arrangement, with the possibility of a further 40-year extension if Britain and Mauritius agree new terms.

Under the financial arrangements presented to Parliament, Britain would pay Mauritius £165 million annually for the first three years for Diego Garcia, falling to £120 million a year thereafter, with inflation adjustments beginning after year 14. The government calculated the average annual cost over the initial 99 years at £101 million in 2025-26 prices, or £3.4 billion on a net-present-value basis.

The agreement was negotiated under former prime minister Keir Starmer. Trump initially supported it after a US government review but subsequently reversed his position, calling the plan a “big mistake” and later “an act of great stupidity”. Britain confirmed in April that implementation had been paused.

Before travelling to New York, Burnham spoke to Mauritian Prime Minister Navin Ramgoolam and pledged to work with Mauritius and the United States on an arrangement that would secure the long-term operation of Diego Garcia. The two leaders also agreed their foreign ministers should continue discussions during the UN General Assembly.

The dispute has roots in Britain’s separation of the Chagos Archipelago from Mauritius before Mauritian independence and the subsequent removal of Chagossian residents. International court rulings have challenged Britain’s continued administration of the territory, one of the principal reasons successive British governments have sought a negotiated settlement with Mauritius.

Streeting rejected calls from the opposition Conservatives to abandon negotiations altogether, arguing that leaving the sovereignty dispute unresolved could itself threaten the base’s future. Conservative defence spokesman James Cartlidge said the agreement should instead be scrapped completely.

As of 24 September, no revised terms have been announced. The 2025 treaty remains signed but not in force, while the Burnham government says it will continue talks with both Washington and Port Louis over the future of Diego Garcia.