Mauritius could build on Chagos Islands near a key US-UK military base, prompting fresh security fears about the potential consequences of Sir Keir Starmer’s handover deal.

Large parts of the archipelago, including its outer islands, have been uninhabited or in a state of disrepair for decades.

But it is understood that Mauritius, which is set to take control of the overseas territory under Labour plans, would be allowed to pursue its own infrastructure projects as part of the deal.

This raises the possibility that businesses from China, a key strategic ally of Mauritius, could also become involved in potential future developments.

The Chagos Islands include Diego Garcia, a military base currently used exclusively by the British and American militaries.

Critics of the deal warned on Friday night that the prospect of China becoming involved in projects on the outer islands could threaten the UK’s long-standing security ties with the US.

Nigel Farage, the Reform UK leader, said: “This dangerous surrender must be stopped or our security relationship with the United States will be over.”