Lord David Hannay, a former UK envoy for the Cyprus issue ruffled some feathers at the Cyprus investment conference in London on Friday, referring to Cyprus as a place of conspiracy theories, and to the taboo “government of the TRNC”.

He also said that in Cyprus, the political problem trumped the economy every time.

The comments received a swift response from Greek Cypriot negotiator Menelaos Menelaou who, as he shared a stage with the former envoy, reminded the UK peer of the correct terminology and of UN resolutions.

In his opening comments, Sir David said that from the outset, he felt the need to emphasise that since Cyprus was “one of those places which is the home of conspiracy theories” that he was not speaking on behalf of the British government for whom he has not worked since he stepped down as special representative for Cyprus in 2003.

“These thoughts are not put out by the British government, believe it or not,” he said.

Lord David went on to say that if “the governments of Turkey and the TRNC” insist on a two-state solution as a precondition for talks, he saw no prospect for progress.

“The words two-state solution may sound seductive but this flies in the face of every UN Security Council resolution adopted over many decades,” he said.

“Trying to address the Cyprus problem now head-on is, in the present circumstances only likely to make things worse, not better.”

Sir David said the status quo in Cyprus was not sustainable or desirable. “There are major shifts in the region. Huge changes. They will not leave the Cyprus problem untouched,” he added.

Referring to the energy situation, he said the least that could be said about the delay in the exploitation of gas was that it was a potential opportunity for Cyprus to benefit commercially and politically to meet its needs if it could be done quickly and economically.

Here he suggested the best way to do this would be to use the Turkish pipeline to Europe.

“Will these possibilities be seriously explored by the newly-elected governments [in Greece, Turkey and Cyprus] in ways that take into account the strongly-held positions of each,” he said.

“It is worth exploring but my experience with Cyprus was that politics always trumped economics,” Sir David concluded.

In response, Menelaou, who spoke after Sir David, said: “Unlike what some people like to believe of us, we are not at all conspiracists. We are pragmatic and forward looking.”

The Greek Cypriot negotiator also warned against using the incorrect terminology “and references to the so-called government of the TRNC”.

Menelaou said the only way back to talks was to redouble efforts to bring the sides back to the table.