Jerusalem - The Palestinian envoy in London, Mr Afif Safieh, claimed yesterday that Britain had signalled its readiness to recognise a Palestinian state if it was backed by a referendum in the West Bank and Gaza.
A British diplomat, however, described the Palestinian reading of how far the United Kingdom would be prepared to go in support of Palestinian statehood as "misconceived". There had been no change in official policy, a Foreign Office spokesman said, which was to support Palestinian self-determination only as part of a wider negotiated Israeli-Palestinian settlement.
The development follows 16 months of deadlock in the Oslo peace process.
Diplomatic sources said Britain has been considering its responses if and when the Palestinian leader, Mr Yasser Arafat, declares statehood next May, as he has pledged to do if there is no radical progress in negotiations by then.