Exiled islanders will not be allowed to resettle on the British-controlled Chagos Islands, the Government has announced.

Foreign Office minister Baroness Anelay of St Johns said around £40 million will instead be offered to support existing Chagossian communities elsewhere in the world, which include Crawley.

Lady Anelay added that agreement has been reached with the US to ensure it can maintain its major military base on Diego Garcia, the largest of the islands, until 2036.

Chagossians were forced to leave the territory in the central Indian Ocean by 1973 to make way for the air base.

The expulsions are regarded as one of the most shameful parts of Britain's modern colonial history.

The decision on whether Chagossians have the right to resettle on the islands, also known as the British Indian Ocean Territory, has been subject to lengthy delays from ministers and legal battles.

In a written statement to Parliament, Lady Anelay said: "I am today announcing that the Government has decided against resettlement of the Chagossian people to the British Indian Ocean Territory on the grounds of feasibility, defence and security interests, and cost to the British taxpayer.

"In coming to this decision the Government has considered carefully the practicalities of setting up a small remote community on low-lying islands and the challenges that any community would face.

"These are significant and include the challenge of effectively establishing modern public services, the limited healthcare and education that it would be possible to provide, and the lack of economic opportunities, particularly job prospects.

"The Government has also considered the interaction of any potential community with the US naval support facility - a vital part of our defence relationship."

The Tory minister said the funding of about £40 million will be available over a 10-year period.

Lady Anelay said: "This money addresses the most pressing needs of the community by improving access to health and social care and to improved education and employment opportunities.

"Moreover, this fund will support a significantly expanded programme of visits to BIOT for native Chagossians."

The deal that allows the US to maintain its base on Diego Garcia was up for renewal this year, with the arrangement continuing for a further 20 years if neither side decided to terminate it before December 30.

Lady Anelay said: "I can today confirm that the UK continues to welcome the US presence and that the agreements will continue as they stand until December 30 2036."

Adventurer and television presenter Ben Fogle, patron of the UK Chagos Support Association, said: "It's another heartbreaking day for the Chagossian community, who have repeatedly been betrayed and abused by their own Government.

"That even now, with so many reasons to support their return, the Government has failed to do the right thing, makes this a dark day in our country's history."

In 2015, Fogle insisted he would charter a boat and take exiled islanders back to their homeland if the Government refused to "right a terrible, terrible wrong".

Poet and writer Benjamin Zephaniah, also a patron of the association, added: "Once again, the people of the Chagos Islands are met with injustice.

"Sadly today's decision is just another familiar scenario in a long and tragic episode of British foreign policy."

Chairman of the association Tom Guha said campaigners are "profoundly saddened" by the Government announcement.

He said: "This is a shameful decision and will be remembered as such in the history books.

"The Government will continue to pay the price - not only in ongoing litigation fees - but in a deepened moral deficit."

Mr Guha welcomed the funding package, adding the association will work with the Government and Chagossian community.

Government research published in January suggested 98% of Chagossians, who predominantly live in Mauritius, the UK and the Seychelles, wanted to resettle.

Of the 832 Chagossians who responded, 25% were in favour of returning under options regarded by the Foreign Office as "realistic scenarios" of what a future community could look like.

The four options ranged from a pilot community of 50 to 150 people up to the largest involving a population of around 1,500.

A further 67% supported resettlement but were "not clear" if they backed the options on offer.

Just 2% of the Chagossians who responded opposed resettlement while 6% said they wanted to return but were "not content" with the community proposals.