Mauritius will end up getting nothing from Britain if it fails to back down over its demand for £800million a year for Diego Garcia, a former top civil servant has suggested.

The Mauritian government has reportedly demanded billions in reparations in addition to the millions it wants from Britain in talks over the Chagos Islands.

London and Port Louis have been trying to agree on a new treaty to hand the Indian Ocean islands to Mauritius after a previous draft deal collapsed following the election of the new Mauritian prime minister, Navin Ramgoolam.

Sir Simon MacDonald, former Permanent Under-Secretary at the Foreign Office and Head of the Diplomatic Service, suggested Port Louis needs to limit its ambitions and is “overplaying its hand” in negotiations.

He told the BBC on Tuesday (December 31) that it is not unusual for a new government to believe it can do better than its predecessor, and that was the “spirit” of early exchanges between London and Port Louis.

Sir Simon added: “The new government isn’t looking to tweak the agreement as far as I can see but is looking for multiple more pounds or dollars from the UK. It feels to me they are overdoing it and will not succeed.”

Prime Minister Sir Keir Starmer‘s surrender of the Chagos Islands raises questions about the future of the joint US-UK military base on Diego Garcia.

Downing Street has refused to say how much money is being discussed to pay for a 99-year lease to secure the base, though a source told the Sunday Times that Mauritius wanted “crazy money.”

London and Port Louis are trying to get a deal done before Donald Trump returns to the White House on January 20. Mr Trump’s administration feels “deep disquiet” over Diego Garcia, which occupies a strategic location in the Indian Ocean and has played a major role in projecting US power in the Middle East and Asia.

Sir Simon said: “Mr Ramgoolam is new in office. He’s not the only new factor on the horizon. The other is President Trump. It’s three weeks until the inauguration. If he thinks it’s going to get easier when we have a new president in the Oval Office, he doesn’t have long to wait to be disabused.”

Asked about transferring sovereignty, Sir Simon said the UK defines itself by abiding by the rule of law and is doing its best to comply with a judgement handed down by the International Court of Justice.

The ICJ ruled in favour of Mauritian calls for sovereignty over the Chagos Islands, finding Britain acted unlawfully in separating the archipelago before Mauritius gained its independence from the UK in 1968.

Sir Simon said: “We won’t be pushed as far as the Mauritians are trying right now. This base is very, very important – much more important for the United States, frankly, than the United Kingdom.

“If there is no agreement, this will linger, maybe for many more years. If it lingers, that means Mauritius will get nothing. If I were advising the Mauritians, I would say, ‘Use the next three weeks wisely’.”

He said doing nothing is still an option, but the UK requires more than one party to agree to a deal, and Mauritius needs to budge.