By Ian Dunt Follow @IanDunt
Argentina is planning to enforce a de-facto economic blockade of the Falklands Islands, according to British diplomats.
The government of Cristina Fernández de Kirchner is reported to be following through on public pressure for Chilean airline LAN to cancel its weekly flight between Punta Arenas and Port Stanley, cutting the islanders off from the outside world.
The decision would force islanders to rely on a twice-weekly 8,000-mile military flight from London, which travels via Ascension Island, near the equator.
It would also force the 250 Chileans who work in the Falklands to travel home via the UK and prevent relatives of Argentinean war dead from visiting their graves.
The threat comes after a UN speech last September in which the Argentinean president threatened the flight route and ratcheted up the tension with Britain ahead of an upcoming 30-year anniversary of the conflict.
Ms Fernandez and David Cameron have been engaged in an increasingly hostile war of words over the contested territory, with both accusing the other of colonialism.
LAN is particularly susceptible to the Argentinean threat. The Falklands journey is a miniscule part of its business, which relies heavily on the country for many of its international journeys, not least a planned Buenos Aires-Miami flight.
The blockade comes as part of a plan to make the islands too expensive for Britain to maintain, after several attempts to get Mr Cameron back to the negotiating table failed.
Writing in politics.co.uk today, Falklands Islands Legislative Assembly member Dr Barry Elsby poured cold water on that suggestion, arguing that apart from military spending the islanders were self-sufficient.
"The Falklands place no strain on the British economy. Whilst the UK contributes to the cost of defence of the islands, this is no more than 0.5% of the total defence budget," he said.
"The Falklands also provides a unique training ground for British military forces, and the Falklands government contributes around three per cent of its GDP towards defence costs. In each and every other capacity, the islands are financially completely self-sufficient."
Last December, a Latin American deal through the Mercosur bloc prevented ships using the Falklands flag from using member states' docks.
The increased tension could not come at a worse time for Britain, which is trying to open up export markets among emerging Latin American nations, particularly in Brazil.
As a cultural and economic leader in the region, Latin American states will be liable to side with Argentina over Britain as emotions escalate in the run-up to the anniversary.