The prime minister of Barbados, Mia Mottley, has halted plans for a multi-million-pound payout to the British Conservative MP Richard Drax for the purchase of 53 acres of the Drax Hall plantation, which he owns.

As revealed in the Observer last Sunday, the payout plan had angered those involved in the Caribbean reparations movement, who said Drax, the MP for South Dorset, should hand over all or part of the 617-acre plantation to the people of Barbados.

In a seven-minute broadcast to the nation released on YouTube on Tuesday, Mottley explained the government U-turn and said she had decided to pause the purchase to allow further discussion.

She added: “I understand the concern of many Barbadians who may feel they have been robbed of the opportunity of having an appropriate settlement for reparations that ought to be made as a result of the blood, sweat and tears of Barbadians over centuries. This is not a matter we take lightly.”

Trevor Prescod, the MP for St Michael East in Barbados and the lead for reparations on the island, believes his country “should not pay a cent for Drax Hall”. He welcomed Mottley’s announcement but he expressed concern over the word “pause”, saying: “I hope I don’t see a renewal of this commercial relationship with Richard Drax.

“I’ve been getting calls from around the world, and I would like to thank the Observer for bringing this to the attention of people in Barbados, the African diaspora and our friends in England who support reparations. People see the relevance of the damage inflicted on African people. We are the people who were described as chattel slaves. Why should we pay those whose family has enslaved us? The taxpayers of Barbados have risen up to defend their money. The Draxes have had enough from us.”

Drax, who is worth more than £150m, was left the plantation in his late father’s will in 2017. Their ancestors built the sugar plantation in the mid-17th century and worked it with enslaved people for 200 years. After the abolition of slavery in 1834, the family received more than £4,200 in compensation, a huge sum at the time.

The 53-acre site has been selected for the development of 500 lower- and middle-priced houses. Mottley has pledged to build 10,000 homes to meet demand on the island, where there are 20,000 outstanding applications for housing.

A senior valuation surveyor said the market value for agricultural land with an alternative use for housing would be about Bds$150,000 (£60,000) per acre. At this price, the 21 hectares could net Drax £3.2m.

In October 2022 Drax went to Barbados to meet Mottley. It is understood he was asked to hand over all or a substantial part of Drax Hall plantation as reparations.

In her broadcast, Mottley made it clear she was not happy with the pace at which discussions were proceeding. She said the government was examining its legal options “not only against the owners of Drax plantation, but also all others who have contributed to the conditions of this country being, regrettably, one of the worst examples of modern racism in the Americas”.

Sir Hilary Beckles, who is from Barbados and chairs the Caricom Reparations Commission, a Caribbean-wide body, has described Drax Hall as “a crime scene”, a place where, he estimates, 30,000 Africans died in slavery.

Drax declined to comment. In the past he has said the role his ancestors played in the slave trade was “deeply, deeply, regrettable, but no one can be held responsible today for what happened many hundreds of years ago”.