The Government has warned Argentina not to doubt its “determination” to protect the Falklands after a South American trading bloc announced a ban on ships with an islands flag from docking at its ports.
The Foreign Office said it was very concerned by the “latest Argentine attempt to isolate” the islands and was in “urgent” discussions with countries in the region.
Mercosur, a trading bloc that includes Brazil, Argentina, Paraguay and Uruguay, reached the decision at a summit in the Uruguayan capital Montevideo.
The dispute involves a vast area of potentially mineral-rich South Atlantic waters and has created a diplomatic headache for Britain, which controls the islands.
A Foreign Office spokesman said: “We are very concerned by this latest Argentine attempt to isolate the Falkland Islands people and damage their livelihoods, for which there is no justification.
“It is not immediately clear what practical impact, if any, this statement will have, which mirrors the language already used by the Union of South American Nations (UNASUR) in 2010. We are discussing this urgently with countries in the region.
“But no one should doubt our determination to protect the Falkland Islanders’ right to determine their own political future.”
Rotherham Labour MP Denis MacShane, a former Foreign Office Minister, said the move was aimed at London rather than the Falklands and blamed the coalition for weakening Britain’s international standing.
He added: “Brazil and other countries know that thanks to Liam Fox’s defence cuts the UK no longer has aircraft carrier capability so British maritime power projection has been fatally weakened by the Government.”
Uruguayan president Jose Mujica said solidarity among South America’s neighbours was key to his country’s foreign policy.
He added: “For the moment, this means accepting that this territory is a colonial British position in our America.”
Mr Mujica said British-flagged civilian ships that may supply the islands would be allowed to use its ports, but not military vessels.
Argentina’s foreign minister Hector Timerman, whose country claims the Falklands as its own territory, thanked him.
The Mercosur decision is the latest in a series by Latin American regional bodies designed to show solidarity with Argentina, which calls the islands Las Malvinas.
Roger Spink, president of the Falklands Chamber of Commerce, said they were a small community and felt increasingly under blockade.
He told the BBC: “If we were Palestine, the European Union would be up in arms.”
Ukip defence spokesman Godfrey Bloom, MEP for Yorkshire and North Lincolnshire, said: “The Foreign Office needs to move on this quickly as it is obvious that we cannot rely on (EU foreign policy chief) Cathy Ashton and the EU’s foreign service to protect the interests of the Falklands or indeed Britain.”