Lord John Ponsonby, envoy of the British Foreign Office in 1828, proposes making the Banda Oriental an independent state.

Britain is anxious to create a buffer state between Argentina and Brazil to ensure its trade interests in the region.

With British mediation, Brazil and Argentina sign the Treaty of Montevideo at Rio de Janeiro on August 27, 1828, whereby Argentina and Brazil renounce their claims to the territories that will become integral parts of the newly independent state on October 3.

However, Argentina and Brazil retain the right to intervene in the event of a civil war and to approve the constitution of the new nation.