The Falkland Islands in the South Atlantic are once again the subject of a dispute between Britain and Argentina, with David Cameron's statement that Argentina's interest in the islands are 'colonialist' surely a contender for the annual 'you must be having a laugh' award.

Back in 1982 a military conflict over the islands lasting two months resulted in the deaths of over 600 Argentinian servicemen and over 200 British. It was a conflict that erupted when Argentina invaded in an attempt to seize control of the islands by force. It was a war that should never have been fought, as British control of the Falklands (known in Argentina by their Spanish name of Las Islas Malvinas) was and remains a part of a shameful history of British colonialism around the world.

Located 300 miles from Argentina and some 8,000 miles from Britain, the Falklands have long been the subject of territorial dispute. At the beginning of the 19th century Spain held sovereignty over the islands, occupying them for 40 years up until 1811, when its former colony of Argentina asserted sovereignty. The islands came under British control in 1833, after they were seized by force, and have remained a British territory ever since.

The war against the then Argentinian government's attempt to seize back the islands in 1982 proved a turning point in the fortunes of the nascent and up to then deeply unpopular Tory government led by Margaret Thatcher. Jingoism swept the country, allowing Thatcher to press ahead with the structural adjustment of the UK economy, which in the process devastated working class communities and delivered a resounding defeat to the trade union movement over the course of a series of hard fought strikes and industrial disputes throughout the early and mid 1980s.

The argument against British sovereignty of the Falklands was harder to make in 1982, as back then Argentina was governed by a brutal military junta which had violently and savagely suppressed any and all dissent to its authority at home. Almost 30 years on, however, the situation is markedly different. Argentina is now a centre left democracy, one of a series of progressive governments that have swept the region over the past decade or so, and up to this point has pursued its claim of sovereignty via attempts at direct diplomacy with the British government and even with the UN. However, with Downing Street refusing to discuss the issue of sovereignty, Argentina's patience is unsurprisingly wearing thin.

This is reflected in its recent decision to implement a ban on any vessel flying the flag of the Falkland Islands from its ports. In this it has been joined by its neighbours and fellow members of Mercosur, the trading bloc of South American states.

Argentina's claim to the islands received the support of neighbouring Latin American and Caribbean governments at last year's Rio summit in Cancun, Mexico. In a statement of solidarity with her claim the summit declared: "The heads of state represented here reaffirm their support for the legitimate rights of the republic of Argentina in the sovereignty dispute with Great Britain."

Regardless, the British government continues to refuse to negotiate sovereignty of the islands, citing the democratic rights of the 3,000 British citizens who currently inhabit them. It should be noted that the same rights were not granted to the inhabitants of another distant British colony, the island of Diego Garcia in the Indian Ocean. The islanders in question were forcibly repatriated to Mauritius, one thousand miles away from their home, to make way for a US airbase in the mid 1960s. However, the islanders and their dependents won a historic High Court judgement back in 2000, declaring their expulsion illegal.

In response the then Blair government promptly rejected any possibility of them being allowed to return to the island, citing Britain's treaty with the US which handed the island over for use as a military airbase. It should not be forgotten, of course, that the former inhabitants of Diego Garcia happen to have dark skin while the 3,000 residents of the Falkland Islands are white, English speaking colonists.

Furthermore, the Falkland Island are not a state. They are governed as British territory. Moreover, the fact that 3,000 islanders are able to influence British foreign policy to the extent they are is madness. If they are intent on remaining British citizens surely they can be repatriated back to the UK.

The issue of proximity must also be taken into account when it comes to this dispute. The notion that Britain can feasibly continue to claim sovereignty over islands that are located 8,000 miles away is a relic of the 19th century that should be relegated to the dustbin of history. Just imagine if the situation was in reverse and Argentina claimed and held sovereignty over the Isle of Wight.

The truth is that self determination is being used as a smokescreen, just as it was when Thatcher was in office in 1982. The real issue is the sizeable oil and gas deposits located in waters close to the islands, where last year drilling began by British oil companies.

It is entirely understandable that Argentina should find British oil companies drilling for oil so close to the shores of disputed territory off its own coast an unacceptable act of provocation, especially since Argentina maintains that Britain has continued to ignore attempts to renew dialogue on the sovereignty of the islands since the war in 1982. In 1995 both countries signed a joint declaration to cooperate on off shore oil explorations in the South Atlantic. However in 2007 Argentina voided the declaration because Britain refused to view it as a step towards meaningful negotiations over sovereignty.

If the sovereignty of Hong Kong can be returned to China without any undue controversy at the end of a lengthy period of leaseback, surely the sovereignty of a tiny group of islands in the South Atlantic, occupied by just a few thousand people can be placed under joint ownership or a similar leaseback arrangement made. This could follow an extended period of joint-sovereignty between both countries in order to effect a smooth transition.

Any British government must be aware that the economic drain of maintaining this distant colony will not be offset by revenue from oil if the vocal support for Argentina's claim throughout the region turns to active support in the form of a trade embargo. Latin America has emerged from centuries of European and North American domination and is determined to assert its rights accordingly.

The Falkland Islands constitute one of the last remnants of British colonialism, part of a history of economic piracy stained with the blood of millions who suffered as a consequence. The sooner this history is brought to a close the better.