Sir Nicholas Bonsor, Minister of State at the Foreign Office, confirmed that Governor Martin Bourke's three-year term, due to expire in September, will not be extended. But he said there was no question of London agreeing to "disproportionate" demands from the islands' politicians for Mr Bourke's immediate removal.
Sir Nicholas was speaking to the Independent after a trouble-shooting mission to the Caribbean. He confirmed that earlier this month the Government had sent a frigate to patrol off the islands in case the confrontation turned violent, but denied this represented an implicit threat of military intervention. The only weapon it had been instructed to employ was its helicopter - to lift British officials to safety if necessary.
The dispute began in February, when Mr Bourke gave a magazine interview in which he said drug-trafficking through the islands had reached a "peak" and crime was spiralling. Sir Nicholas yesterday said he had expressed regret for these remarks in talks with politicians of the islands. "The Governor said some things which, I think, were tactless ... He assures me that he was not aware that they were part of the official interview."
Sir Nicholas said he was satisfied drug-trafficking to the US through the Turks and Caicos was not at a peak but had been substantially reduced in the past decade. He hoped his visit would help to defuse the crisis but conceded the problems were not over: local politicians were still refusing to work with Mr Bourke.
Sir Nicholas attributed the crisis to the convergence of two events in February: the Governor's remarks and the acquittal by a local jury of four prominent islanders arrested the year before on drug-smuggling charges.
The case became known as a kind of local version of the OJ Simpson trial: the acquittals, in the face of considerable evidence, caused astonishment among white residents and jubilation among the overwhelming majority black population. "These things do tend on small islands to get blown up out of all proportion," Sir Nicholas said.
The British government is believed to be considering ways of handling high-profile drug trials differently in future. One possibility would be to introduce for certain trials something like the Northern Island Diplock Courts, in which the judiciary acts as both judge and jury.