“Beijing regrets Panama’s decision,” foreign ministry spokesman Lin Jian said, urging Panama to “consider the broader bilateral relationship and the long-term interests of both nations” and “resist external interference”.

Since winning the US election in November, President Donald Trump has refused to rule out the use of force to seize the canal built by Washington over a century ago and later handed over to Panama.

Around 40% of US container traffic passes through the narrow body of water linking the Caribbean Sea with the Pacific Ocean.

Beyond the tolls paid, Washington has appeared chiefly concerned about Chinese investment in the 80-km-long canal, which handles 5% of global maritime trade.

The country’s president Jose Raul Mulino yesterday, confirmed that Panama had pulled out of the Belt and Road Initiative (BRI) infrastructure programme.

In response, Beijing said it “firmly opposes the US using pressure and coercion to smear and undermine Belt and Road cooperation”.

“Its achievements have benefited people in countries such as Panama,” Lin said.

The BRI is a massive infrastructure project that is a central pillar of Chinese president Xi Jinping’s bid to expand his country’s clout overseas.

Western critics accuse China of using the BRI to enmesh developing nations in unsustainable debt to exert diplomatic leverage over them or even seize their assets.