The Foreign Office considered the possibility of allowing Argentina a naval base on the Falkland Islands just two weeks before the 1982 invasion, newly declassified documents disclose.
They show how David Joy, of the British Embassy in Buenos Aires, contacted his Chilean counterpart Raul Schmidt to discuss tensions withArgentina before filing a restricted memorandum on March 5 1982.
Chile and Argentina had long been in dispute over the possession of Picton, Lennox and Nueva islands in the Beagle Channel at the southern tip of South America and had come to the brink of war in 1978.
According to the documents, as revealed by BBC World's Spanish language service, Mr Schmidt told Mr Joy that Argentina's sovereignty disputes with Chile and Britain both stemmed from the country's desire to have a naval base further south.
"The Schmidt thesis is based essentially on the Argentine Navy's need of a strategic port further south than its current and most secure port, Puerto Belgrano, (south of the province of Buenos Aires)," one document states.
"The obvious option Ushuaia was not satisfactory from a security point of view because it is under constant Chilean surveillance.
"Therefore the Argentines are, according to Schmidt, desperate to have some other secure port further south, a goal that could be satisfied by having access to the islands south of Beagle or the Falklands. In this context, he believes the sovereignty disputes are linked."
On March 15 the report, headed 'A Common Burden with Chile?', was received and distributed to Colin Bright, manager of the South American section of the Foreign Office, and other senior officials.
Handwritten notes were then added to the documents, suggesting the British were open to the idea of negotiating an agreement for an Argentine naval base on the Falklands just two weeks before the war began.
One scribbled note states: "I think we are agreed that the Argentine interest in South Atlantic security is part of her wish to gain sovereignty over the islands. But it's only a small part. After all, if all they wanted was a naval base we could easily accommodate them."
Another in different handwriting comments: "Could we easily accommodate the Argentines on a naval base? Because this is the sort of idea which we should have in mind if negotiations do resume."
Argentina long disputed rulings that the islands in the Beagle Channel were Chilean but finally recognised them as such in 1984 following papal mediation.