Sitting in a gilded armchair in his official palace, President Abdirahman Mohamed Abdullahi looks every inch the statesman.

As well he might: unusually for East Africa, Somaliland has free and fair elections, a two-chamber parliament in its capital, Hargeisa, a legal system inspired by British colonial law and an army that is accountable to its politicians.

Its deposits of gold and rare earths are being explored, and its 530 miles of coastline lead to the Bab al-Mandab strait – a maritime chokepoint between the Indian Ocean and the Red Sea.

Up to 15 per cent of global shipping passes through the strait, which is sometimes menaced by Houthi drones and missiles. The military and trading opportunities are obvious.

Yet Britain, despite its intertwined history with the state, has long refused to recognise its legitimacy through fear of jeopardising its African interests and diplomatic ties.

It therefore risks losing out on the key strategic benefits that recognising Somaliland could bring – and countries such as China are already moving in to fill the void.

Mr Abdullahi, wearing his trademark gold-embroidered hat, tells The Telegraph: “Our relationship with Britain is unshakeable, but we expect Britain to recognise us. If Britain supports human rights, freedom of speech and democratic stability, it should give us its support.”

Britain holds a crucial diplomatic position in shaping Somaliland’s future as the United Nations (UN) “penholder”, making it responsible for the region.

Mr Abdullahi accuses the UK of double standards in not recognising Somaliland. He claims it passes all the tests of statehood in the Montevideo Convention, whereas the newly recognised State of Palestine does not.

The Somaliland position has, though, been weakened by jihadi-backed militia seizing control of stretches of its territory in lawless border areas. A frontier dispute with neighbouring Puntland, another breakaway Somali state, also threatens its claim to exert undisputed authority.

Mr Abdullahi, known as Irro, pointed to how his unrecognised country had had a quarter of a century of elections and kept terrorism and piracy in check. Meanwhile, Somalia remains a failed state.

Somaliland could offer Britain a strategic force projection and trading advantages, analysts say, but after decades of diplomatic equivocation, London’s influence on the ground is waning.

In its place, China is scrambling to expand its military presence in Africa in a race for power against the US.

Beijing already has a naval base in neighbouring Djibouti and is transforming strategic ports so it can service warships and reach nearby mines easily to transport critical minerals.

Turkey is turning Somalia into a client state and Gulf states are also pursuing their own interests.

One of Hargeisa’s major allies is the United Arab Emirates (UAE), whose shipping giant, DP World, has invested $442m (£329m) in Berbera, Somaliland’s main port.

This promises to become the new gateway to East Africa: an anticipated deal with landlocked Ethiopia could see maritime trade increase by 40 per cent.

Berbera is also home to a major Emirati military complex, with one of Africa’s longest runways, which is under construction opposite Houthi territory across the Gulf of Aden. In future, this facility is expected to host US and Israeli forces.

The main US air base in the region, Camp Lemonnier, is in Djibouti. Several officials and analysts, including Rashid Abdi, a regional expert based in Kenya, said Washington was “scouting for territory” for an alternative base in Somaliland.

But it is unlikely the US would pack up and leave Camp Lemonnier because it would mean ceding total control of Djibouti to China.

Mr Abdi says: “This is a grand strategic game as Washington tries to contain China in the Red Sea. Hormuz has underlined the importance of waterways. Washington is debating recognising Somaliland to prevent the Bab al-Mandab strait from falling under Beijing’s control. China hawks like Ted Cruz are pushing hard for recognition.”

Israel became the first UN member state to recognise its independence and sovereignty formally in December. Yet when Israel recognised Somaliland, Britain was one of its most vociferous critics, strongly affirming London’s support for Somalia.

Hargeisa reacted with fury. Mr Abdi says: “It almost caused riots on the streets. The most Anglophile people in Africa were being stabbed in the back. It was a real blow for them.”

Recently, Somaliland’s British friends were appalled when it was reported that it had supported Argentina’s claim on the Falkland Islands.

Fake news, insists the president, spread by social media propagandists. Mr Abdullahi says: “We reject that totally. We have no relationship with Argentina. We back Britain’s ownership of the Falklands.”

Britain colonised Somaliland in 1844 (mainly for the sake of its strategic sea lanes, which offered an advantage over Imperial France). Somalilanders fought under the Union flag in both world wars, including in the Somaliland Camel Corps.

The territory remained a British protectorate until 1960, when it was granted independence. Neighbouring Somalia was freed from Italian control at the same time.

Five days later, the two chose to unify, but Somalilanders chafed under Mogadishu’s repressive regime. Throughout the 1980s, hundreds of thousands of Somalilanders were killed and many fled to Britain, settling in London, Birmingham, Cardiff and other cities.

In 1991, Somaliland successfully re-established itself as a separate state. The devoutly Sunni Muslim enclave, where alcohol is forbidden and the hijab ubiquitous, then embraced Western-friendly democracy – and became the only jurisdiction on Earth to combat election fraud with iris scanners.

It is by no means a democratic utopia, though, with female genital mutilation, clan discrimination and Islamic law incorporated into the state. Across the border, Somalia, which is at the top of the world fragile states index, descended into corruption and jihadi chaos. But the international community remained wedded to the status quo ante.

Deprived of international recognition, Somaliland, with its population of six million people, remains locked out of the global financial system, unable to take out sovereign loans, issue bonds or receive support from the International Monetary Fund or World Bank.

This severely restricts its infrastructure financing, currency stabilisation, long-term development projects and access to cheap capital.

By contrast, Somalia – huge swathes of which are controlled by the al-Qaeda affiliate al-Shabaab – enjoys lavish British support. Its government has strong Islamist links; its prime minister, Hamza Abdi Barre, supports Hamas and has referred to Jewish people as “children of pigs and dogs”.

China, Turkey and Qatar are among Somalia’s allies. Yet eye-watering amounts of British aid money have poured into Mogadishu, despite suspicions it has lined pockets and funded terrorism. This year alone, £61m of taxpayers’ cash has been transferred, with very little trickling down to Somaliland.

Israel’s friendship with Somaliland is not new. Israel was the only state to condemn the atrocities of the 1980s at the UN Security Council.

Given Israel’s recent reputational damage, the alliance has had a chilling effect on some of Somaliland’s other relationships. Yet Mr Abdullahi remains bullish, unafraid to pin his country’s colours to the mast.

He says: “From the beginning, our relationship has been open, frank and friendly. Those criticising us can mind their own business. I will make an official visit to Jerusalem this year.”

This week, 50 Somalilander special forces troops returned from training in Tel Aviv, The Telegraph has learnt. At a ceremony in Hargeisa on Tuesday, an Israeli delegation presented the president with a fragment of an Iron Dome missile interceptor – a symbol of Jerusalem’s protection.

Israel’s move has opened the door for other nations to follow suit. Possible suitors include democracies facing tyrants of their own, such as Taiwan, which has close ties with Somaliland. Speculation that the UAE would offer recognition this week proved unfounded, though officials in Hargeisa remained confident it was just a matter of timing.

Britain’s stance was set in 2012, when Lord Cameron, the then prime minister, convened a London conference that ended by backing a unified Somalia. This position has hardened under Labour.

According to Omar Mahmood, a senior Horn of Africa analyst at the International Crisis Group, such strategic ambiguity shows diplomatic wisdom.

He says: “There’s no need to choose a side. From a security perspective, Britain has interests both in Somalia, which is threatened by al-Shabaab, and Somaliland. It makes sense to maintain both relationships, as recognition would aggravate Somalia and incur a diplomatic cost.”

Mr Mahmood argues that a resolution can only be found through negotiations between the two sides. He says: “I don’t think jumping the gun on recognising Somaliland is helpful. It would create a proxy conflict, which is a dangerous route to go down.”

There are fears that recognising Hargeisa’s sovereignty would open a Pandora’s Box of entitlements and grudges across the region. Somalia might be prompted to assert its quiet historic claim to parts of northern Kenya and Ethiopia, while the nationalistic Somali region of Puntland, which holds territory in Somaliland, could respond with open warfare.

In addition, Whitehall worries that clunking British intervention could inflame old colonial resentments. Britain could end up at loggerheads with the African Union, a collection of mainly authoritarian regimes with delicate territorial tensions of their own.

Sir Gavin Williamson, a former UK defence secretary, who leads Somaliland’s new international recognition campaign institute, and travelled to Hargeisa to mark Somaliland’s 35 years of self-rule this week, brushes this aside.

He says: “Colonial guilt and a slavish adherence to meaningless international law are now the key drivers of Britain’s foreign policy, as opposed to making a difference to the security and prosperity of people on ground and our national interest.

“We are too frightened of our history to show any leadership, so players such as China and Turkey step into the vacuum, using the Horn of Africa as their playground. Malign actors now rule the roost. This colonial guilt and postcolonial inability to lead isn’t helping anyone. East Africans want us to lead, but there’s no leadership there.”

The former colonial power, he adds, had always vowed to be the second country to recognise Somaliland – once another state had paved the way. “It was just a lie,” says Sir Gavin. “This is reaching a point of deep embarrassment.”