A treaty over ceding sovereignty of the Chagos Islands to Mauritius has become “impossible to agree at political level” and the corresponding bill will not complete its passage through parliament, a Foreign Office minister has said.

Stephen Doughty told the Commons that the agreement with Mauritius was initially negotiated in close coordination with the US, but Donald Trump’s position “appears to have changed”.

The UK government was forced to shelve its legislation to hand the Chagos Islands to Mauritius after the US dropped its support for the agreement.

As part of the deal, the UK was to cede sovereignty of the Chagos Islands to Mauritius, and lease the island of Diego Garcia, which is the site of a joint UK-US military base, for 99 years to continue operations.

Doughty said Trump had initially described the treaty as “very strong and powerful”, adding that the document had been “tested thoroughly at all levels of the United States system under two administrations and found to be robust”.

But with the withdrawal of US support, Doughty said it had become impossible to agree an update to the the 1966 UK-US agreement, known as the “exchange of notes”, over the availability for defence purposes of British Indian Ocean territories.

Doughty told MPs that updating the 1966 agreement was necessary to ratify the treaty, and so “the Diego Garcia bill can therefore not complete its passage this parliamentary session and cannot be carried over due to its advanced progression through parliament”.

He added: “The government nevertheless remains confident that the Diego Garcia treaty is the best means of protecting the full operation of the military base for future generations, for us and our allies.”

The setback in the UK’s push to hand the Chagos Islands to Mauritius, is a sign of the worsening US-UK relations after Trump’s heavy criticism of Keir Starmer over his stance on the Iran war.

Doughtly said: “The delay to the treaty will be sad news to many Chagossians – although I accept not all – who rightly see it as the only viable means to a sustainable programme of resettlement, which Mauritius would be able to implement under its terms.”