Families displaced from their Indian Ocean home for a life in Crawley have challenged the Government over claims it would be too costly and impractical for them to be returned.

Around 2,000 people from the Chagos Islands were moved by the UK in the 1960s and 1970s so the US could build an airbase at Diego Garcia.

They went initially to Mauritius and later about 800 moved to the UK. Most were settled in Crawley but have staged a long legal battle to win the right to return.

Their protests included a vigil outside the West Sussex County Council offices in the town.

Last year the Court of Appeal ruled the exiled families have the right to go back to the island but ministers have applied to take the case to the House of Lords for a final decision. The Government said resettling the islanders could lead to "substantial, open-ended" liabilities to British taxpayers and environmental damage.

A report commissioned by the islanders said "no valid environmental or economic reasons" stand in the way of the return of a small number of families.

Going Home, written by resettlement expert John Howell, puts the cost at £25 million and makes a number of proposals.

The former director of the Overseas Development Institute said 150 families, less than 1,000 people, are expected to settle during the first five years, with eco-tourism and exports of fresh fish providing jobs and money.

Conservation areas would be set up to protect rare birds, fish, turtles and coral, and fishing would be carefully managed.

The report also proposes a Development Trust to co-ordinate public and private investment and a Resettlement Commission.

The total cost to the British Government is estimated at £25 million, including £17.5 million in capital costs and £7.5 million in technical assistance.

In 2000, the High Court ruled a 1971 Immigration Ordinance banning people without permits from entering or remaining in the colony was unlawful.

In 2004, the Government changed the procedure under which the eviction was ordered, using its socalled royal prerogative to establish an Order in Council. In 2006, the High Court ruled the Government had acted illegally in removing the islanders from their homes.

The report was officially launched yesterday at the House of Lords.