The US is looking to use the Australian-administered Cocos Islands – a group of tiny coral atolls in the Indian Ocean – to launch unmanned drones as it continues its strategic pivot away from the Middle East towards Asia Pacific.
The Cocos Islands are a group of 27 small coral islands halfway between Australia and Sri Lanka
The move comes amid concerns that the main US launching point in the Indian Ocean – the British island territory of Diego Garcia – is overcrowded and that the base's future is uncertain. The US lease is due to expire in 2016.
The plan to use the Cocos Islands is part of ongoing efforts by Washington to boost military ties with Canberra and use the Australian territory.
The Cocos Islands are a group of 27 small coral islands halfway between Australia and Sri Lanka – about 1,700 miles east of Diego Garcia – and would significantly add to the US's reach across the Indian Ocean.
The expanded ties with Australia would also provide US ships in the Indian Ocean with greater access to Australia's Stirling naval base in Perth, according to a Washington Post report.
The US is already set to begin stationing up to 2,500 Marines in Darwin next month in a deployment announced by Barack Obama during his first presidential visit to Australia last November.
Though US officials have resisted singling out China, the shift towards the region has been widely seen as an attempt to protect vital trade and shipping routes.
"This is all about China, of course," said Professor Hugh White, from the Australian National University in Canberra. "Australia is in a very complicated position in this. None of us want to live in an Asia dominated by China, but none of us want to have an adversarial relationship with China."
Stephen Smith, Australia's defence minister, said last November that "down the track, there may well be some greater use of the Cocos Islands" by Australian and US forces. He has expressed an interest in making better use of Australia's assets in the Indian Ocean – and an ongoing review of the country's bases specifically noted the "potential strategic and security role for Australia's offshore territories, particularly Cocos and Christmas Islands".
However, Mr Smith's office said on Tuesday that expanded use of the Cocos Islands was a longer-term option for expanding Australian-US engagement and was not an immediate priority.
"On the issue of drones and Cocos Islands, the details of any possible US air or ship access to the Cocos Islands have yet to be discussed or decided upon," a spokesman said.
The Cocos Islands were annexed by Britain in 1857 and transferred to Australian control in 1955. The islands, with a population of about 600, could reportedly be used to launch Global Hawk surveillance drones and manned surveillance flights. Australia and the US have conducted joint trials of the drone, which could be used for wide-ranging ocean surveillance.
US officials regard Australia as its only ally the Indian Ocean and are reportedly keen to expand its military presence there.
"In terms of your overall influence in the Asia-Pacific zone, the strategic weight is shifting south," a senior Australian official told The Washington Post.
"Australia didn't look all that important during the Cold War. But Australia looks much more important if your fascination is really with the Southeast Asian archipelago."