Sir Keir Starmer was accused of a “dangerous capitulation” after giving up the strategically important Chagos Islands to a Chinese ally.

The Prime Minister handed the group of islands in the Indian Ocean territory to Mauritius, prompting accusations of “shameful retreat” and a “surrender”.

The 60-strong island chain is home to the Diego Garcia military base, which is leased by the UK to the United States and has been used for American bombing missions in the Middle East.

While the deal to hand back sovereignty included provisions for the UK and US to continue using Diego Garcia for 99 years, fears are intensifying Chinese intelligence agencies could exploit Beijing’s relationship with the Mauritians to use the surrounding islands to monitor the base and British and American assets.

Analysts also warned it will give Beijing effective control over the islands.

And many are now concerned the Government could strike similar deals over the Falkland Islands or even Gibraltar.

Tory leadership candidate Tom Tugendhat told the Daily Express: “By giving away sovereignty of the Chagos Islands to Mauritius, this government has weakened Britain’s position in the Indo-Pacific at a time when we need strength to counter the rising threat of China.

“This decision also highlights their lack of conviction and leadership in safeguarding our national security.

“This short-sighted move betrays our allies and the UK citizens of the Chagos Islands.

“It’s deeply disappointing that the Foreign Secretary is intent on repeating past mistakes.

“Tony Blair rightly warned that Britain must not lose any more territory, yet this decision proves Labour hasn’t changed since Corbyn – still prioritising foreign dictators over Britain’s security.”

Tory leadership candidate Robert Jenrick said: “Handing over our strategically important territory to an ally of China and paying them for the privilege is an act of surrender.

“It has clearly been announced while Parliament isn’t sitting to avoid scrutiny but we will fight this dangerous sellout whenever Starmer brings legislation forward to enable it.”

The US used Diego Garcia to fly bombing missions to Afghanistan in the aftermath of the 9/11 attacks, and to Iraq from 2003.

Since 2006, it has been used as an “unsinkable aircraft carrier” facility to supply troops working in the Middle East.

Former Defence Secretary Grant Shapps said: “This is absolutely appalling.

“Surrendering sovereignty here creates read-across to other British bases. It’s a weak and deeply regrettable act from this government.”

Former Home Secretary Suella Braverman added: “This is a shameful decision. Starmer’s reckless capitulation over the Chagos Islands severely undermines UK national security.

“We all knew Lammy was weak but now it’s official: he’s China’s useful idiot too. A dark day for our country’s sovereignty.”

Tory leadership hopeful James Cleverly, a former foreign secretary, also criticised the British Indian Ocean Territory decision.

He said: “Weak, weak, weak! Labour lied to get into office. Said they’d be whiter than white, said they wouldn’t put up taxes, said they’d stand up to the EU, said that they be patriotic. All lies.”

But a source close to Mr Tugendhat’s campaign said: “Labour’s decision to push forward the deal negotiated by James Cleverly to give up the Chagos Islands has raised questions about the government’s commitment to the Falkland Islands.

“The Falkland Islands are British. No debate. Full stop. Tom won’t trade away sovereignty.”

Chagossians have spent decades fighting to return to the islands after more than 1,000 people were forced to leave in the 1960s and 1970s to make way for the military base.

Thousands of Chagossians now live around the world, mostly in Mauritius, the UK and the Seychelles.

Foreign Secretary David Lammy said in a statement on Thursday that the agreement would still secure the “vital” military base for future use.

He said: “This government inherited a situation where the long-term, secure operation of the Diego Garcia military base was under threat, with contested sovereignty and ongoing legal challenges.

“Today’s agreement secures this vital military base for the future.

“It will strengthen our role in safeguarding global security, shut down any possibility of the Indian Ocean being used as a dangerous illegal migration route to the UK, as well as guaranteeing our long-term relationship with Mauritius, a close Commonwealth partner.”

President Biden also welcomed the “historic” decision.

The US President said: “This agreement affirms Mauritian sovereignty over the Chagos Archipelago while granting the United Kingdom the authority to exercise the sovereign rights of Mauritius with respect to Diego Garcia.

“Diego Garcia is the site of a joint U.S.-UK military facility that plays a vital role in national, regional, and global security.

“It enables the United States to support operations that demonstrate our shared commitment to regional stability, provide rapid response to crises, and counter some of the most challenging security threats we face.

“The agreement secures the effective operation of the joint facility on Diego Garcia into the next century.

“We look forward to continuing our strong partnership with Mauritius and the United Kingdom in upholding a free and open Indo-Pacific.”