Ministers are in talks over a 3.5m deal for America's Cup-winning yachtsman Ernesto Bertarelli to fund the policing of the zone around the British-owned Chagos Islands, home to at least 60 endangered species.
The Marine Protected Area will cover some quarter of a million square miles of sea around the archipelago in the Indian Ocean.
The Chagos have been the subject of a long-
running controversy as the islanders exiled to make way for the United States airbase on Diego Garcia continue a legal fight for the right to return home.
The 55 islands forming the British Overseas Territory are home to more than 220 types of coral.