Argentina has taken control of the waters around the Falkland Islands in an escalation of its row with Britain over the disputed territory.
The move would effectively grant it the power to blockade the British-ruled archipelago.
It comes as relations between the two countries hit a new low earlier this month following the recent discovery of oil reserves buried in the Falklands seabed.
Discovery: Oil reserves have been found buried in the Falklands seabed
Officials announced yesterday that all boats sailing through the waters claimed by Argentina must hold a government permit.
'Any boat that wants to travel between ports on the Argentine mainland to the Islas Malvinas, South Georgia and the South Sandwich Islands...must first ask for permission,' Cabinet chief Anibal Fernandez said.
The announcement means Argentina will be able to control all traffic from South America towards the islands, including an oil rig due to begin drilling by early next year.
The South American country still claims sovereignty over the archipelago it knows as 'Las Malvinas' nearly three decades after the end of the Falklands War in which more than 1,000 people died.
Simmering tensions boiled over earlier this month when Britain announced plans to begin offshore exploration drilling near the remote islands.
Geologists estimate there are up to 60 billions of barrels of oil in the seabed near the Falklands and a British company, Desire Petroleum, is due to begin drilling 100 miles north of the islands before the end of the month.
Argentinian cruiser General Belgrano sinks after being torpedoed by the British Royal Navy in May, 1982. The ten-week conflict killed 255 British soldiers and 649 Argentine soldiers
British soldiers disembark at a jetty at San Carlos Bay during the Falklands conflict, which began when Argentina invaded the South Atlantic islands in April 1982
A £20million offshore oil rig, the Ocean Guardian, is expected to arrive this week.
The Argentine foreign minister registered a 'most forceful protest' over the drilling two weeks ago. Before that, Argentina's senior diplomat in Britain, Javier Pedrazzini, was hauled into the Foreign Office in London for a dressing down after Buenos Aires passed a law claiming sovereignty over the Falklands.
Argentina’s foreign minister, Jorge Taiana, vowed to take 'all necessary legal and diplomatic measures' to recover sovereignty over the islands.
Last week, the dispute almost escalated into a major diplomatic row after a ship carrying drilling equipment, was blocked from leaving the Buenos Aires port.
Argentina's government claimed the ship, the Thor Leader, was loaded with pipes bound for the Falklands and accused Britain of 'illegally promoting' drilling operations.
Aftermath: HMS Antelope sinks off Ajax Bay in May 1982. She sank after an unexploded Argentine bomb went off during an attempt to defuse it
A memorial for the Royal Fleet Auxiliary at Fitzroy in the Falklands pays tribute to 56 soldiers kiilled nearby when two British ships were hit
It also vowed to blacklist companies providing services to the exploration effort.
A move to control shipping is the latest development in the dispute - which Argentina says it will take to the UN.
Jorge Taiana, its Foreign Minister, warned that his goverment would take 'all necessary steps' to defend its claim on the islands, 300 miles from the coastline.
He said a presidential decree would force all ships bound for the islands or travelling through waters claimed by Argentina to secure the new permit.
The Falklands, which islanders say were first sighted by an English navigator in 1592, have been under British rule since 1833.
Argentina invaded the South Atlantic islands in April 1982 only to be defeated and expelled by a British task force.
The conflict lasted 74 days and cost the lives 255 British soldiers, and 649 Argentine soldiers.
Since 1993, the population of more than 3,000 people on the self-governing overseas territory have all been legal British citizens.
The islanders have tried to shrug off the prospect of a new conflict. 'There has been an economic blockade of the Falklands from Argentina for many years now,' said Roger Spink, the director of the Falkland Islands Company. 'It’s something we’ve come to expect.'
Britain has more than 1,000 military personnel on land and more than 300 at sea in the region, as well as four Typhoon jets, a destroyer and a patrol boat in the region.
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