BRITAIN could be asked to pay millions of pounds for the facilities its sovereign military bases on Cyprus have used over the past 40 years, to help to finance reunification of the island.

Greek Cypriots fear that they will be asked to shoulder the financial burden of reunification with the impoverished northern half of Cyprus and are likely to seek international assistance.

The issue of compensation from Britain, which has not been broached at official level by Cyprus for at least a decade, was raised by Alexis Galanos, chairman of an economics advisory committee to President Papadopoulos.

Two strategic bases were retained by Britain when Cyprus won independence in 1960. As sovereign territory they are not subject to rent. But Cyp- riot officials say that Britain has a “binding obligation” by treaty to pay for the use of facilities such as roads, ports and public utilities.

“Great Britain owes us money for the facilities the Cyprus Republic offered to the British bases according to the treaty of establishment,” Mr Galanos said. “It’s not a question of rent.”

He said that his panel would recommend that Mr Papadopoulos raise the issue in discussions with Britain. The question of money could come within the context of an international donors’ conference to help to finance a Cyprus settlement. “I don’t know precisely how much money they owe, but the accumulated amount would be considerable,” Mr Galanos, added.

There is little affection on Cyprus for the British military presence, which most Cypriots regard as anachronistic. However, there has been almost no political opposition over the years, and few politicians are willing to alienate London.

Analysts said that Mr Galanos’s remarks are likely to be popular with Cypriots but could cause diplomatic waves.

“This is a particularly high-profile raising of the issue at a very sensitive time,” James Ker-Lindsay, a political analyst in Nicosia, said.

“Britain is aware that under a solution it will have to dip its hand in its pocket along with the EU and US. But this could put Britain on the defensive.”

In the event of a solution, Britain is already prepared to relinquish nearly half the 98 square miles covered by its two bases, which could be developed for tourism.

Intensive UN-brokered negotiations are under way in Nicosia that are aimed at reuniting the island under a federal system before it enters the EU in May.

Greek Cypriots, who are far better off than the isolated Turkish Cypriots, fear that the settlement bill could put an intolerable strain on their economy. They estimate it could reach £18.5 billion, about double the GDP of both areas combined. A large proportion of that represents compensation to people who will lose their land in the settlement, and the rest covers reconstruction costs and relocation of people affected by a redrawing of the boundaries between the two sides.

To encourage a settlement, the EU has pledged €259 million (£173 million) to the Turkish Cypriots in development aid for 2004-06.

A spokesman for the British High Commission in Nicosia said: “We acknowledge the importance of the international community providing the necessary financial assistance to underpin a settlement and we are working closely with the UN, the EU and the US to ensure this assistance is in place.”

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