Falkland Islanders are to given the chance to vote on their future, its legislative assembly has announced.
A referendum will take place in the first six months of 2013 giving the archipelago's inhabitants the opportunity to choose whether to remain a self-governing overseas territory of the UK.
The announcement comes in the week that the Falkland Islands marks the 30th anniversary of its liberation from Argentinean forces at the end of the 1982 Falklands War.
News of a referendum has been welcomed by the British government, which has faced growing pressure from Argentina over its ongoing sovereignty over the Islands. Buenos Aires has undermined Britain's trading position across South America as part of its campaign to get the UK to give way.
"We have thought carefully about how to convey a strong message to the outside world that expresses the views of the Falklands people in a clear, democratic and incontestable way," Gavin Short, speaking on behalf of the legislative assembly, said.
"So we have decided, with the full support of the British government, to hold a referendum on the Falkland Islands to eliminate any possible doubt about our wishes."
Mr Short did not deny that the outcome of the referendum was not in doubt. Falkland Islanders are predominantly British in outlook and the move will be interpreted as a political one designed to make the point that its inhabitants wish to remain under the UK indefinitely.
"We are holding this referendum not because we have any doubts about who we are and what future we want, but to show the world just how very certain we are about that," he added.
The UK will use the referendum to advance its own interests in the region, which have been damaged by Cristina Fernandez de Kirchner's regime.
"Next year's referendum will determine beyond doubt the views of the people of the Falklands," Mr Cameron said in response to the announcement.
"Britain will respect and defend their choice. We look to all UN members to live up to their responsibilities under the UN charter and accept the Islanders' decision about how they want to live."
Foreign Office minister Jeremy Browne is in the Falklands this week. Speaking from Port Stanley he said: "I believe this referendum is a truly significant moment. It will give the Falkland Islands people the opportunity to send a clear message – not just to Argentina, but to the whole of the international community – that the Islanders, and they alone, are masters of their fate."