By Ed Harris

POINTE AUX SABLES, Mauritius, Sept 9 (Reuters) - Chagos islanders returning to their Indian Ocean homes almost 40 years after being forced to leave could make a living from coconuts, fishing and ecotourism, a resettlement adviser said on Sunday.

Britain ejected some 2,000 islanders from their tropical archipelago during the Cold War to make way for the U.S. military base on Diego Garcia island, which has since been used for military campaigns in Afghanistan and Iraq.

The British government had tried to block their return but suffered its third legal defeat in May, when Britain's High Court said the right to go home was "one of the most fundamental liberties known to human beings".

John Howell, a senior research associate at the Overseas Development Institute, an independent think tank based in London, is helping prepare a 10-year resettlement strategy based around environmental sustainability and economic viability.

"Clearly coconuts might be one source of income. Coconut prices are quite low, and there are major transport costs, but that was the original basis of the islands," he told Reuters.

Fishing, fishing rights and high-value ecotourism were also likely sources of income, he said, refusing to put a figure on the cash needed for a resettlement.

"You can possibly even get enough money for tourism through private investment to pay for an airstrip," he said after an open meeting of the Chagos Refugee Group in a Mauritian suburb.

Such improvements would "transform things", he added.

The refugees led by Olivier Bancoult have spearheaded the legal battle against the British government. It is now looking to resettle up to about 1,000 islanders on the Salomon Islands and Peros Banhos, two of the Chagos archipelago's six atolls.

The Chagossians would likely be approaching a range of donors for support including the British government, the European Union, and American foundations including those with an environmental interest, Howell said.

"Once you've settled people on a fragile atoll like that, you've got to be very careful about water use, drainage, about people fishing offshore, all these things," he said.

"A coral reef needs to be protected."

The islanders would also have to have enough skills between them to manage facilities such as a small harbour, he said.

Estimated at about 5,000 people, many Chagossians have taken advantage of their new British passports to settle in Britain.

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