The bill to give Bermudians British passports and the right to live and work in the United Kingdom and European Union passed its final parliamentary obstacle and is likely to become law in the first half of next year.

The Overseas Territories Bill now only needs the technicality of a third reading and Royal Assent from the Queen to become law after MPs in the House of Commons on London approved a second reading on Thursday night.

But implementation of the bill is likely to be held up until next year as Foreign and Commonwealth Office officials work out the final details on passports, such as where they will be issued.

Bermudians will now have the right to take up a British passport or reject it, and Bermuda will now be referred to as a British Overseas Territory rather than a British Dependent Territory.

But the bill does not give Bermudians who take up a British passport the right to pay higher education fees at the same low rates as British citizens. This, and other benefits such as free health care, will remain dependent on how long a person lives in the UK.

Terms like "dependent territory," were "no longer appropriate," Junior Foreign Office Minister Ben Bradshaw told Parliament.

"They are outdated and fail to reflect either the nature of our relationship and partnership with the overseas territories and modern reality," he said.

Around 200,000 people in Bermuda and the other territories - Anguilla, British Antarctic Territory, the British Indian Ocean Territory, British Virgin Islands, Cayman Islands, Montserrat, Pitcairn Island, St. Helena and dependencies, South Georgia and the South Sandwich Islands, the Turks and Caicos Islands - are affected by the bill.

The law will automatically confer British citizenship, but Bradshaw said the people of these territories would not be compelled to accept it.

"We believe most people will want it, but British Overseas Territory citizens will have the option to renounce British citizenship and to retain their current status should they so wish," he said.

Deputy Governor Tim Gurney told The Royal Gazette last night: "I expect the bill will pass in the New Year, but there may be a bit of a gap between Royal Assent and implementation, and that's because there are a number of administrative and logistical issues to be resolved which are being worked on.

"Its going to take a little bit longer after the bill goes through, but it is being worked on and it will be resolved."The bill is non-reciprocal, which means although Bermudians and overseas territories residents can live and work in the UK, British citizens will not be entitled to move and work in the territories