A major conservation row is developing over proposals for Britain to establish the biggest and most unspoiled marine nature reserve in the world. The issue of the Chagos Islands raises the increasingly difficult question of how to weigh up the protection of the best remaining parts of nature, in a rapidly degrading world, against the needs and rights of people.

The Hawks bill turtle is critically endangered. (ALAMY) It concerns the Chagos Archipelago in the middle of the Indian Ocean, a group of isolated coral islands teeming with wildlife which is considered to be among the least polluted marine locations on Earth. Its seawater is the cleanest ever tested; its coral reefs are completely unspoiled; its whole ecosystem, with its countless seabirds, turtles, coconut-cracking crabs (the world's largest), dolphins, sharks and nearly 1,000 other species of fish, is pristine.

Officially British Indian Ocean Territory, the islands are the subject of an ambitious plan by conservationists - backed by the Foreign Secretary, David Miliband - to keep them the way they are, by creating a marine protected area, where fishing and all other exploitation would be banned, of 210,000 square miles - more than twice the land surface of Great Britain. In an age when the oceans and their biodiversity are being ever more despoiled, it would be a supreme example of marine conservation and one of the wildlife wonders of the world - in effect, Britain's Great Barrier Reef, or Britain's Galapagos.

The plan excites many wildlife enthusiasts and has the formal support of several of Britain's major conservation bodies, from the Royal Botanic Gardens of Kew and the Zoological Society of London to the Royal Society for the Protection of Birds. The backing of the Foreign Office and the Foreign Secretary is significant. A public consultation on the plan ends on Friday.

But there is a notable omission from the plan. It takes no account of the wishes of the original inhabitants, the Chagossians - the 1,500 people living on the islands who, between 1967 and 1973, were deported wholesale by Britain, so that the largest island, Diego Garcia, could be used by the US as an airbase for strategic nuclear bombers.

When, in the 1990s, details emerged of the Chagossians' enforced exile, which left them in poverty and unhappiness on the Indian Ocean island of Mauritius, it was widely seen as a substantial natural injustice; and in 2000 the then-Foreign Secretary, Robin Cook, gave them permission to return.

However, after 9/11, Diego Garcia assumed a new strategic importance for the US - it is used as a base for bombing missions over Afghanistan (and has also been used for the CIA's "extraordinary rendition" flights taking captives around the world for interrogation).

As a result, in 2004 the British Government reversed Cook's decision to let the islanders return, using the Royal Prerogative and bypassing Parliament. The islanders, some of whom are still in Mauritius and some of whom are now in Britain, challenged this decision, and in three judgments in successively higher courts, ending with the Court of Appeal, had it reversed, and won back their right of return.

But in 2008 the Government made a final appeal to the House of Lords, citing American security concerns and the potential cost of returning the islanders, and in October that year the law lords, by a majority of three to two, upheld the Government's stance. The Chagossians, who now number about 4,000, have taken their case to the European Court of Human Rights, which is expected to rule on the matter in the summer.

In the meantime, the plan to make their former homeland a strictly protected area, where any sort of economic activity, from fishing to tourism, might be ruled out - thus rendering the Chagossians' return impossible - is being keenly promoted and is gaining more and more support.

The plan has been put forward by the Chagos Conservation Trust (CCT), a charity established in 1992 to protect the islands' wildlife from the commercial exploitation, pollution and overfishing that are wrecking so many of the world's coral islands. It has the backing of the Pew Environment Group, an American conservation charity which campaigns for ocean protection and helped persuade George W Bush to declare the Northwestern Hawaiian Islands a marine reserve in 2006. (At 140,000 square miles it is currently the biggest in the world, but would be dwarfed by Chagos.)

The CCT and Pew have mounted an impressive campaign, bringing nine major conservation bodies into the Chagos Environment Network to press the case on the public and the Government. Mr Miliband sounds as if he is already persuaded, writing: "This is a remarkable opportunity for the UK to create one of the world's largest marine protected areas and double the global coverage of the world's oceans benefiting from full protection." The options the consultation paper presents are about the level of protection necessary, from a full no-take marine reserve, to some fishing allowed, to one just protecting the coral reefs. It would in principle be possible for Mr Miliband to sanction a marine protected area quite soon, before this year's general election; it would not need primary legislation but would be declared by the British Indian Ocean Territory commissioner under British Indian Ocean Territory law. The Foreign Office has been talking to the Americans and it is thought that US concerns about the Diego Garcia base are unlikely to prove a stumbling block. The reserve might be declared before the result of the islanders' case in the European Court of Human Rights.

There is no doubt that the case for full protection is a formidable one. The Chagos Islands alone contain around half of the healthy coral reefs remaining in the Indian Ocean (including the largest coral atoll in the world, the Great Chagos Bank), and an untouched plethora of marine life which almost everywhere else is suffering massive losses from over-exploitation, pollution and bycatch. With full protection, the archipelago could provide the Indian Ocean with an "oasis" for marine and island species.

Yet the Chagossians contend that the case for protection - which in general terms they accept - is flawed because it does not take in to account their wishes. The marine reserve proposal stresses the advantage of the islands being "uninhabited" and mentions the former residents only briefly and obliquely, saying that any decision would be "without prejudice" to the current court case in Europe, and adds: "This means that should circumstances change, all the options for a marine protected area may need to be reconsidered."

Among those leading the criticism is a retired senior diplomat, David Snoxell, who is the co-ordinator of the Chagos Islands All-Party Parliamentary Group. "The consultation is extremely unfair to the Chagossians," says Mr Snoxell. "It deliberately ignores them. People are running this campaign with the idea of keeping the islands uninhabited for time immemorial." The Chagossians themselves would very much welcome a marine protected area, but they need to be part of it, Mr Snoxell says.

"We will support the project only if we are physically involved in it all the way, and our right of return to the Chagos Archipelago is not compromised," said Roch Evenor, a spokesman for the islanders and secretary of the UK Chagos Support Association. "With the Chagossians living on Chagos we will be able to help the marine protected area, as our presence will be a deterrent factor for illegal fishermen who are fishing the sea cucumbers and sharks. We can co-exist - the Chagos archipelago could be something great if we all put our heads together and collaborate."

Chagos Islands: UK's barrier reef

The Chagos Islands possess a wealth of wildlife, and are special above all for their coral; they contain some of the world's healthiest surviving coral reefs, which hold at least 220 coral species and up to 1,000 species of fish. The islands are a refuge and breeding ground for large and important populations of sharks, dolphins, marine turtles, rare crabs, birds and other vulnerable ocean and island species.

In marine terms, British Indian Ocean Territory is by far the most wildlife-rich part of the UK and all its overseas territories; the archipelago is isolated and at the very centre of the Indian Ocean where it acts as an "oasis" for species which are in decline or under pressure elsewhere in the region, from the effects of population growth and development. The fact that 54 of the 55 islands are uninhabited (the exception being Diego Garcia with its US base) is undoubtedly a major reason why the ecosystem has remained so unspoiled. Highlights include:

Coconut crab (Birgus latro)

The world's largest land arthropod, with a leg span of over 3ft and a weight of up to 9lb, this crab can climb trees and even crack a coconut with its massive claws. It is now rare in most of the tropical areas where it is found, but the Chagos population is undisturbed and healthy.

Hawksbill turtle (Eretmochelys imbricata)

This turtle is the principal source of tortoiseshell material; it has been over-hunted all around the world and is critically endangered. But the atolls of the Chagos are perfect breeding and nursery sites for it, and local populations are flourishing.

Grey reef shark (Carcharhinus amblyrhynchos)

In the Indian Ocean, shark numbers are down about 90 per cent over the last 30 years because of overfishing (especially for shark fin soup), and such a decline is also evident in Chagos waters. Conservationists think that making the islands a no-fishing zone could help them recover.

Emperor angelfish (Pomacanthus imperator)

The coral reefs of the Chagos archipelago hold up to 1,000 fish species, many of them dazzlingly coloured, including clownfish, triggerfish and several species of angelfish.

Masked booby (Sula dactylatra)

The islands are an enormously important seabird refuge, with 17 species nesting there, often in large colonies, ranging from the masked booby to the red-tailed tropic bird, and from the great frigatebird to the sooty tern.