This image released by the US Navy shows an aerial view of Diego Garcia in the Chagos Island group. File photo: VCG

The UK government has been forced to shelve its legislation to hand the Chagos Islands to Mauritius, after the US dropped its support for the agreement, the Guardian reported on Saturday, describing the setback as "a sign of the worsening US-UK relations."

A Chinese expert said the development once again highlights divergences between the UK and the US on geopolitical issues, and reflects a deepening rift in bilateral ties.

UK government officials have said they are not entirely abandoning the agreement, which would hand sovereignty of the British territory to Mauritius, but have run out of time to pass legislation before Parliament is prorogued in the coming weeks, according to the BBC.

A UK government spokesperson said that Diego Garcia is a key strategic military asset for both the UK and the US. Ensuring its long-term operational security is, and will continue to be, our priority - it is the entire reason for the deal, according to the Guardian.

"We continue to believe the agreement is the best way to protect the long-term future of the base, but we have always said we would only proceed with the deal if it has US support," said the spokesperson, cited by the Guardian.

The Chagos Islands, officially known as the British Indian Ocean Territory, are located in the Indian Ocean and Britain has controlled them since the early 19th Century. The deal would see the UK cede sovereignty of the territory to Mauritius, and pay an average cost of £101m ($136m) a year to lease back a joint UK-US military base on the largest island, Diego Garcia, according to the BBC.

Cui Hongjian, a professor at the Academy of Regional and Global Governance at Beijing Foreign Studies University, told the Global Times on Sunday that US support for the handover has always been conditional, given the strategic importance of the UK-US base on Diego Garcia, particularly for projecting military power into the Middle East.

Cui noted that during the joint US-Israeli strikes on Iran, Washington had sought access to UK bases, but London declined at an early stage. This, he said, prompted the US to attach greater importance to maintaining its military presence on Diego Garcia and to become more reluctant to see the islands returned to Mauritius.

Cui pointed out that while the UK had traditionally been among the first to support US military operations in the Middle East, Washington did not notify London in advance of the recent strikes on Iran, and later sought to use UK bases, potentially exposing Britain to retaliatory risks, underscoring a mismatch in strategic interests.

The Guardian also pointed out that the US president has previously criticized the plan, which is backed by the US state department, telling Starmer he was "making a big mistake" by handing sovereignty of the islands to Mauritius in exchange for the UK and US being allowed to continue using their airbase, according to the Guardian.

However, earlier in February Trump had described it as the "best" deal the prime minister could make in the circumstances. The US president also endorsed the handover when Starmer visited the White House last year, the guardian reported.

Mauritius has pledged not give up on repossession efforts. Speaking at an Indian Ocean Conference hosted in Mauritius on Saturday, Foreign Minister Dhananjay Ramful said that his government would "spare no effort to seize any diplomatic or legal avenue to complete the decolonization process in this part of the Indian Ocean," adding that "This is a matter of justice," according to Al Jazeera.