A Swiss billionaire has stepped in to save plans to create the world's largest marine reserve from public spending cuts, it emerged today.

Ministers are in talks over a £3.5 million deal for America's Cup-winning yachtsman Ernesto Bertarelli to fund the policing of the zone around the British-owned Chagos Islands.

The Marine Protected Area (MPA) will cover some quarter of a million square miles of sea around the archipelago in the Indian Ocean and include a "no-take" reserve banning commercial fishing.

It was approved by then foreign secretary David Miliband in April amid complaints that the Government failed to take account of the needs of the territory's exiled inhabitants.

The Chagos have been the subject of a long-running controversy as the islanders exiled to make way for the Diego Garcia US airbase continue a legal fight for the right to return home.

Fears had been raised however that the project could be scrapped without private funding to offset the £750,000 a year set to be lost in fees for lucrative tuna fishing licences.

But campaign group the Blue Marine Foundation said it had secured the backing of the Bertarelli Foundation to provide the necessary financial backing - with ministers agreeing the deal in principle last week and detailed contracts now being drawn up.

Italian-born entrepreneur Mr Bertarelli and his British wife Kirsty - a former Miss UK - are believed to share a £6 billion fortune based on pharmaceuticals and biotechnology.

The deal includes the provision of a patrol boat - named the Pacific Marlin.

Blue Marine said a £1.5 million deal to provide fuel for the patrols had been negotiated separately by the Pew Foundation, part of the Chagos Environmental Network, and the Pentagon.

Junior foreign office minister Henry Bellingham welcomed the initiative - hailing it as a "great example" of how the Government could engage the private sector to find funding.

"As the world's largest marine reserve, the MPA will bring huge environmental benefits to the Indian Ocean and to the world," he said.

"It will double the global coverage of the world's oceans benefiting from full protection. We hope that the UK's example encourages others to do the same in other vulnerable areas.

"We are very grateful to the Bertarelli family, their foundation and to the Blue Marine Foundation for their interest and we look forward to working with them.

"This Government wants to form innovative partnerships with the private sector to deliver ambitious objectives. This is a great example of how this could work in practice."

Journalist Charles Clover, who set up Blue Marine in the wake of making a film - The End of the Line - about global overfishing, said he had feared the whole project could have been scuppered "because of what is, to a government, a relatively small amount of money".

A search by fellow campaigners to find a rich individual willing to help found the Bertarelli Foundation had "the vision and the pockets to match", he said. "Hats off to them."

Conservationists have long campaigned for the creation of a marine reserve to protect some of the world's most unspoilt seas and coral reefs against pollution, climate change and loss of species.

The 55 islands across 210,000 square miles in the middle of the Indian Ocean which form the British Overseas Territory have at least 60 endangered species in their coral reefs and waters.

They are home to more than 220 types of coral, 1,000 species of fish and at least 33 different seabirds and have been described as the most pristine tropical marine environment on Earth.