The Trump administration is said to be concerned Sir Keir Starmer’s plan to give away sovereignty of the Chagos Islands could expose the US to Chinese spy boats. Donald Trump last week sensationally hit out at the proposal,calling it an “act of great stupidity”, despite previous support from the White House. 

The UK has agreed to hand over sovereignty of the Chagos Islands to Mauritius, an ally of China. Under the controversial £3.4billion deal, the UK would lease back the island of Diego Garcia which is home to a strategically important UK-US military base. However, senior members of the Trump administration are said to be worried at the prospect of handing control over waters around Diego Garcia.

Officials are concerned this could open the door to Chinese espionage by sea, The Telegraph reports.

Beijing is believed to operate a fleet of vessels, disguised as fishing boats, to conduct espionage in its neighbours’ exclusive economic zones.

The agreement, condemned by the Conservatives as a “surrender deal”, to hand over sovereignty of the Chagos Islands was struck in May 2025.

However, the islands remain British territory as it stands because the agreement is yet to have been ratified by Parliament.

The US President is putting on more pressure to scrap the move, despite previously endorsing it.

Under the deal, the UK would also lose control of the Chagos Islands’ internal waters, territorial sea, archipelagic waters and exclusive economic zone.

According to The Telegraph, analysts believe Mauritius is unable to properly defend the crucial Chagos Marine Protected Area (MPA).

Senior Tory MPs Sir Iain Duncan Smith and Tom Tugendhat have written to the PM expressing concerns over this.

They wrote: “We are concerned that China may use the opportunity of an improperly monitored and maintained MPA to engage in similar activities in waters near the military base at Diego Garcia.”

The MPs also asked Sir Keir for reassurance that he is content Mauritius “has the means to secure and monitor the MPA and that the threat of Chinese espionage through a maritime militia has been mitigated”.

Labour has said it needs to transfer sovereignty of the Chagos Islands because of international legal rulings, which were non-binding, in favour of Mauritius.

Foreign minister Seema Malhotra said that if the Diego Garcia base was lost due to a legal challenge, the UK would struggle to defend its foothold in the Indo-Pacific, adding the deal “protects” the base from legal threat.

A Government spokesperson said: “The Diego Garcia military base is crucial to the security of the UK and our key allies, and to keeping British people safe.

“The Diego Garcia treaty has robust security provisions that categorically prevent compromises to the base.

“The deal protects the base for generations and ensures that the UK can retain unique and vital capabilities to deal with a wide range of threats.”