BBC Diplomatic Correspondent, Barnaby Mason: "tiny places fear being swamped"

But in response to a report in the British newspaper, The Guardian, that a decision in principle to do so had already been taken, the officials said more work needed to be done before an announcement could be made. Diplomatic Correspondent Barnaby Mason reports:

The issue of citizenship for an extra 130,000 people is the key element in a British government White Paper which is not expected to be published before September.

The point which has caused the most trouble in the argument about citizenship inside the government is whether it should operate both ways. The number of people ever likely to come and live in Britain from the colonies - or Overseas Territories as they're now called - is very small.

Fears of being swamped

1995: Bermudans vote to stay a British colony

Some of them, like Bermuda or some of the Caribbean islands, are in any case doing very well out of financial services or tourism. But reciprocal citizenship would give people in Britain the right to go and live in the Overseas Territories.

Such tiny places fear being swamped, especially since the right of abode would extend to all the citizens of the European Union.

The argument has been mainly between the Foreign Office, which wants to be generous, and the Home Office, which has put the case for reciprocity.

The indications are that things are moving in the direction of granting the right of abode in Britain to the Overseas Territories without making it reciprocal.

That's the case with Gibraltar and the Falkland Islands, the only ones to have had the right to live in Britain restored since citizenship was taken away from all the colonies more than thirty years ago.