Britain denies reports it will pay more to finalise Chagos Islands deal

LONDON (Reuters) - A British minister denied on Wednesday media reports that the government could end up paying billions of pounds more to Mauritius under a renegotiated deal to retain a U.S.-British military base on Diego Garcia in the Indian Ocean.

Stephen Doughty, a foreign office minister, told parliament that reports in the British media that the cost of payments to retain the base could rise from 9 billion pounds ($11.29 billion) to 18 billion pounds were "categorically untrue".

"There is no change to the substance or the quantum in relation to the agreement," he said. "There is a huge amount of speculation, I would take the vast majority of it with a pinch of salt."

Britain struck a deal in October to cede sovereignty of the Chagos Islands to Mauritius - a former colony that became independent in 1968 - while retaining control under a 99-year lease of the military base on Diego Garcia, the largest island of the Chagos Archipelago.

However, the Mauritian Prime Minister Navin Ramgoolam, who was elected in November, has questioned the deal, and U.S. President Donald Trump's team are also examining the agreement.

Ramgoolam said on Tuesday that Britain had agreed to a number of changes, including that the lease could only be extended with the agreement of both countries.

He also added that payments for the lease would be front-loaded and protected from inflation, which could increase the cost in real terms.

The British government has so far refused to reveal details of the cost of the deal.

Priti Patel, the spokesperson on foreign affairs for the opposition Conservative Party, told parliament the deal was "one of the worst foreign policy failures in modern British history".

"Labour are surrendering an absolutely critical, strategic defence asset," she said. "And now we are told that we have to pay billions for privilege of doing so."

A non-binding resolution in the United Nations General Assembly in 2019 said Britain should give up control of the archipelago after wrongfully forcing the population to leave.

($1 = 0.7973 pounds)

(Reporting by Andrew MacAskill; Editing by Alex Richardson)