Oil potential

Argentina claims sovereignty over the archipelago it calls las Malvinas and since Kirchner became president in 2003 he has increased efforts to persuade Britain to discuss the issue.

A joint declaration on South-west Atlantic Offshore Cooperation Activities had led to a deal between the two countries to share oil exploration and production on September 27, 1995.

But Taina said that although [former Argentinian president] Carlos Menem had said that the declaration would "allow Argentina to join the exploration and exploitation of crude in the area … in practical terms, it never happened," Taiana said.

"Argentina does not oppose co-operating with the United Kingdom, so long as this contributes to reopening talks about the islands' sovereignty."

Taiana said he had informed Britain's ambassador to Buenos Aires about the decision to end the oil deal.

Observers think that Argentina would further push its claims on the islands if large reserves of oil were discovered.

Seismic studies around the archipelago indicate as much as 60 billion barrels of crude lie in ocean-bed structures.

'Permanent objective'

But little progress has been made in extracting it. Test wells drilled in 1998 by Shell and Amerada Hess hit oil, though not of sufficient quality or volume to be marketable.

Argentina invaded the islands on April 2, 1982 under a military junta led by general Leopoldo Galtieri.

More than 900 people died in the ensuing conflict, including 655 Argentines, 255 British troops and three islanders, before Argentine forces surrendered on June 14, 1982.

The two countries re-established diplomatic relations in 1990.

Argentina has repeatedly reaffirmed its "permanent and inalienable objective" of reclaiming the islands, which have been British-ruled for 174 years.

"The only way to solve this anachronistic colonial dispute is in  a pacific, just and lasting manner," Taina said.