Keir Starmer is facing major pressure to reveal the true cost of his deal to surrender the UK’s last territory in the Indian Ocean, amid growing anger at the cost to the UK taxpayer.

The Prime Minister confirmed today that the UK plans to hand the Chagos Islands to Mauritius under a deal that will cost taxpayers an average of £101million a year for almost a century.

But he said that the total cost of the agreement, which will see the UK lease back the Diego Garcia air base for 99 years, would be just £3.4billion.

Documents released today show that the UK will actually pay Mauritius £165million a year for the first three years to lease Diego Garcia, which is used by the United States.

It falls to £120million a year for the following decade and then £120million adjusted for inflation for the rest of the 99-year lease.

However the documents also show Britain will also pay £45million a year for 25 years – more than £1.1 billion in total – into a fund for ‘projects that promote the ongoing economic development and welfare of Mauritius and its people’.

There is also a one-off fund of £40million to help Chagossians displaced by the creation of the base in the 1970s.

Some reports suggest the true cost of the handover will be closer to £30billion in cash terms, assuming an average of 2 per cent inflation, at a time when the government has cut winter fuel payments for pensioners and has capped child benefits. 

That figure is also three times the annual GDP of Mauritius. 

Sir Keir sparked uproar this afternoon as he insisted the UK had no choice but to cede its last territory east of Suez or face legal action that threatened Diego Garcia’s security.

Sir Keir said the £3.4 billion cost of the Chagos Islands deal was how the Government counted the ‘net cost’ of the 99-year lease.

The Prime Minister was challenged why he used that figure when payments of £101 million a year added up to near £10 billion over the course of the agreement.

He told reporters: ‘That is the net cost, and the reason it’s put in those terms is because that is how the Government counts for it, it’s how the OBR (Office for Budget Responsibility) counts the cost, and it’s the way public sector projects are measured.

‘In other words, what’s the net cost today? And that is £3.4 billion. Obviously, over time with inflation, then that is the net cost.’

The deal, which will cost Britain almost £500million in the next three years alone, was announced after an 11th hour legal bid to halt it failed.

Speaking in Hertfordshire this afternoon the PM insisted that the UK had ‘no alternative but to act in Britain’s national interest’.

Speaking at Northwood Headquarters Sir Keir said: ‘President Trump has welcomed the deal along with other allies, because they see the strategic importance of this base and that we cannot cede the ground to others who would seek to do us harm.’

And US secretary of state Marco Rubio tweeted that the deal ‘secures the long-term, stable, and effective operation’ of Diego Garcia, which the US pays the running costs of. 

Sir Keir said the Government had to ‘act now’ as the Mauritians would likely win legal disputes against Britain.

He said: ‘If Mauritius took us to court again, which they certainly would have, the UK’s longstanding legal view is that we would not have a realistic prospect of success and would likely face provisional measures orders within a matter of weeks.’

But shadow home secretary Chris Philp said: ‘What a disgrace. This weak fool Starmer is handing over British sovereign territory to Mauritius – which has never owned these islands – and no court order requires us to do so.

‘Our security is undermined by this – a lease is not the same as sovereignty and Mauritius is an ally of China, who could now install military equipment in the archipelago.

‘And British taxpayers are left paying the huge bill for Starmer’s stupidity.’

But Sir Keir said Nigel Farage and Kemi Badenoch are in the column with Russia, China and Iran on the Chagos Islands deal.

‘In favour are all of our allies, the US, Nato, Five Eyes, India,’ he said.

‘Against it, Russia, China, Iran and, surprisingly, the leader of the opposition and Nigel Farage are in that column alongside Russia, China and Iran, rather than the column that has the UK and its allies in it.’

The Prime Minister’s plan to announce the deal this morning that he was handing the archipelago to Mauritius was thrown into chaos after a High Court injunction was made in the dead of night. 

Two Chagossian women born on Diego Garcia – now home to a major UK/US airbase – are fighting the handover as part of their bid to be allowed to return home.

But after an emergency hearing this morning Mr Justice Chamberlain ruled that the handover of the islands, formally the British Indian Ocean Territory, can go ahead.

Sir James Eadie KC, for the Foreign Office, had argued that ‘damage has already flowed’ from the delays caused by the injunction being issued, and a decision was needed by 1pm to get the deal done today.

The handover agreement, which has been approved by US president Donald Trump, is highly controversial.

Mauritius, which is friendly towards China, will be handed billions of pounds of taxpayers’ money over decades for the lease to Diego Garcia.

Critics say the country’s friendly relations with Beijing mean the agreement will hinder the security of the base.

Speaking outside the High Court after the decision, claimant Bertrice Pompe told reporters: ‘We have rights. We are British citizens, yet our right doesn’t count. We don’t want to give our rights to Mauritius, we are not Mauritians.’

Sir Keir was due to attend a virtual ceremony alongside representatives from the Mauritian government this morning to sign off on the deal.

But in the early hours of this morning it emerged a High Court has granted an injunction stopping the negotiations being concluded.

Mr Justice Goose granted ‘interim relief’ to Ms Pompe and Bernadette Dugasse at 2.25am.

The Chagossians were forced to leave the central Indian Ocean territory by 1973 to make way for the base.

But Mr Justice Chamberlain this afternoon said the ‘principles of law seem to me to provide a strong answer’ to the Chagossians’ case’.

Dismissing the injunction, he told the court: ‘The government had made clear that once the agreement is signed, it will be the subject of a Bill in Parliament. That will give Parliament time to consider the agreement and, if the view is taken in Parliament that the deal is an undesirable one, then it will not succeed.’

He added: ‘Even though it has been necessary to consider this case at very quick speed, I am not satisfied that the claimants have established a serious issue to be tried.

‘Even if I had considered that that threshold had been met, I would not have continued the interim relief, and that is because of the delay in bringing these proceedings.

‘They waited two months. It is obvious that negotiations have been ongoing for some time. I can infer that those negotiations have been taking place between March and now. If a party wishes to challenge a complex process of negotiation with a third country state, with all the legal difficulties involved, it must do so [in good time].’

Under the terms of the agreement, Britain is expected to give up sovereignty of the island territory to Mauritius, and lease back a crucial military base on the archipelago for 99 years. That was expected to cost £90million a year.

The Government has argued that it has to give up sovereignty over the islands due to international legal rulings in favour of Mauritius. 

Following the signing ceremony, MPs were due to be updated on the terms of the deal in the House of Commons, which could include a 40-year extension to the lease of the military base.

Mr Justice Goose issued the 2.25am injunction, ordering: ‘The defendant shall take no conclusive or legally binding step to conclude its negotiations concerning the possible transfer of the British Indian Ocean Territory, also known as the Chagos Archipelago, to a foreign government or bind itself as to the particular terms of any such transfer.’

The order continued: ‘The defendant shall in particular not dispose of the territory in whole or in part.

‘The defendant is to maintain the jurisdiction of the United Kingdom over the British Indian Ocean Territory until further order.’

According to the order, the judge granted the injunction ‘upon consideration of the claimant’s application for interim relief made out of court hours’ and ‘upon reading the defendants’ response’.

A Government spokeswoman said: ‘We do not comment on ongoing legal cases. This deal is the right thing to protect the British people and our national security.’ 

Diego Garcia, the largest of the Chagos Islands, is home to a joint UK-US military base, used to project Western influence in the Indian Ocean.

Critics of proposals to hand over the islands to Mauritius fear the move will benefit China, which has a growing reach in the region.

News reports recently suggested the deal had been delayed, with the Times newspaper claiming it had become ‘toxic’ amid criticism from Labour’s political opponents.

The Conservatives are among those which have criticised Labour’s handling of the negotiations, though they began discussing the handover with Mauritius when they were in power.

Speaking in the the House of Commons just this week, Defence Secretary John Healey insisted the base on Diego Garcia was ‘essential to our security’, and the UK’s security relationship with the US.

‘We’ve had to act, as the previous government started to do, to deal with that jeopardy, we’re completing those arrangements and we’ll report to the House when we can,’ he added.