Britain imposed direct rule on the Turks and Caicos islands yesterday, suspending the constitution, dismissing the Parliament, handing power to a London-appointed Governor and halting the right to trial by jury.
The move, announced by the Foreign Office, followed an inquiry into allegations of deep-seated corruption among the ruling elite in the Caribbean dependency, located about 500 miles south-east of Florida.
In suspending the constitution for two years, Governor Gordon Wetherell said his goal was to "make a clean break from the mistakes of the past" and establish "a durable path towards good governance, sound financial management and sustainable development".
Under the leadership of Michael "Iron Mike" Misick, the islands' premier who resigned earlier this year, Turks and Caicos fell victim to what the inquiry commission called "clear signs of political amorality and of general administrative incompetence".
Efforts by Mr Misick to prevent the suspension through British courts failed yesterday, ending the last legal challenge to the re-imposition of rule from London. The cabinet and all legislative bodies have been vacated.
Mr Wetherell insisted that the move did not amount to a "British takeover", but the sitting prime minister, Galmo Williams, accused Britain of launching a coup d'état. Mr Williams said: "Our country is being invaded and re-colonised by the United Kingdom, dismantling a duly elected government and legislature and replacing it with a one-man dictatorship, akin to that of the old Red China, all in the name of good governance."
Foreign Office Minister Chris Bryant said: "This is a serious constitutional step which the UK Government has not taken lightly but these measures are essential in order to restore good governance and sound financial management."
The suspension of the constitution comes after a nine-month inquiry led by Sir Robin Auld uncovered allegations of endemic corruption, leading the former judge to recommend the suspension of trial by jury to avoid political interference with potential jury pools.
The commission of inquiry found that a Slovak developer, Mario Hoffman, had availed Misick of loans and other incentives amounting to $6m (£3.6m) in exchange for Salt Cay, a former pirate base island at the eastern end of the chain. That development has now been abandoned. The commission also heard of a developer on Dellis Cay who provided $500,000 to a member of Misick's cabinet as a "political campaign donation".
The commission's report further alleged that the island's tourism budget was effectively used for the prime minister's aggrandisement and lifestyle. Misick was married to LisaRaye McCoy, a former hip-hop video dancer who was selected as the public face of the island in tourist brochures.
The couple split after McCoy was landed with the repayment loans on a Rolls-Royce and accused her husband of raping a friend. Prosecutors are said to be looking into bringing charges against Misick and four of his cabinet members. With the right to a jury trial suspended, they would be tried before a panel of three judges.
While direct rule is largely welcomed on the islands, the Royal Navy has stationed a supply vessel in the deep channel between the Turks and Caicos. In seeking to reassure citizens there yesterday, Governor Wetherell said he was committed to holding free and fair elections by July 2011.
"In the meantime we must all learn to foster a quality of public spirit, listen to all those who have the long-term interests of these islands at heart, and safeguard the fundamental assets of the Territory for future generations."
Misick, along with other senior officials, continues to deny accusations of corruption that were highlighted by a parliamentary committee and Commission of Enquiry last year.
Mr Wetherell said: "Our guiding principles will be those of transparency, accountability and responsibility. I believe that most people in the Turks and Caicos will welcome these changes."