More than 1,000 miles from the African coast, Ascension Island is a refuge and breeding ground for millions of birds.

For the past two centuries it has also served as one of the Western world’s most vital staging posts, guarding Napoleon in his St Helena exile, policing the seas to stamp out slavery, linking the Atlantic’s undersea cables, offering a lifeline to the Falklands and monitoring the skies for satellites, space shots, radio transmissions and the electronic signals of terrorists and hostile powers.

The birds, once threatened with extinction, are now returning in their millions, thanks to a programme to eradicate feral cats and other predators. But while wildlife conservation is flourishing, Ascension is not.

Unless the Ministry of Defence pays millions of pounds in unpaid taxes for its RAF airbase, the island will be bankrupt by June. The only school will have to close, the hospital will have no doctors, the few shops, one hotel and fledgeling tourist trade will be unviable. Even the conservation programme will have to be abandoned.

The threat comes because the MoD is determined to cut costs to pay for Afghanistan. Its refusal to pay back-taxes on the airbase that Britain shares with the US has left Ascension with a £900,000 deficit on its £6 million budget. The island’s small council and government, responsible for all services to the 900 inhabitants, have cut spending to the bone.

Unless a deal can be done in Whitehall, Britain’s strategic asset in the South Atlantic may soon become no more than a barren fortress, the function it first had when troops arrived in the 1820s to prevent a French fleet from rescuing Napoleon.

The row pits the MoD against the Foreign and Commonwealth Office, which has a keen interest in Ascension’s viability, not only because of international obligations to protect the island’s ecology, but also because Ascension houses a key listening post for GCHQ, Britain’s electronic intelligence service. It also has one of the world’s most powerful relay stations, broadcasting BBC programmes in dozens of languages across Africa and Latin America.

The BBC World Service depends on Ascension, and the 50 specialist engineers who maintain the power station and vast array of transmitters, antennas and satellite dishes would leave overnight if they were forced to send their families off the island. Without the BBC relay there would be no power generation or desalination plant. There would be no water for anyone on the island except the Americans, who operate their own power and desalination plants.

The quarrel stems from the establishment of a proper administration in 2002 to replace the ad hoc services reluctantly provided by the BBC and other users of the island. It is also the result of Britain’s decision to keep Ascension a closed island, inaccessible without a permit and with no right of abode for those working there.

The reason is that Ascension is one vast listening station, packed with radar, antennas and military intelligence personnel. The Americans, who own the two-mile runway (one of the world’s longest, designed to accommodate the space shuttle), have no interest in outsiders prying into their affairs.

The crisis comes as Ascension boasts one of the boldest and most successful conservation programmes in any British overseas territory. The plan to kill all the feral cats was controversial. The birds now nest on the main island again — and thousands circle the guano-covered rocks daily in a long breeding season.

Some of the work is vital in monitoring climate change. Next year, if the budget is not settled, it may all stop. The tiny island that has played such a crucial role in British history, from Napoleon to the Falklands war, would be ruined by a quarrel in Whitehall.

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