In return, Egypt undertook to maintain the military locations and to make them available to Great Britain in the event of war. The international status of the zone was also recognized by Egypt.
The canal, completed in 1869, was operated by the Compagnie universelle du canal maritime de Suez , which was granted a 99-year concession. Egypt had been involved in this society to a very large extent through its Vice-King Muhammad Said . His successor Ismail Pasha had to sell the shares to the British due to the high national debt. Not least because of this, Egypt came completely under British protectorate .
Even after the de facto regaining independence, the company, and thus the canal and the area around the canal, was completely in foreign hands, especially British and French.
In the early 1950s, discussions began about what should happen when the license expired in 1968. The company continued to seek a non-Egyptian solution as Egypt was seen as incapable of such a business. Great Britain in particular did not want to lose its influence. It still had a military base in the Suez Canal Zone as negotiated in a 1936 treaty .
When the Royal Egyptian Government was replaced by the military coup led by Mohamed Nagib and Gamal Abdel Nasser in 1952 , there was an abrupt deterioration in relations between Egypt and Great Britain.
The new government wanted a national solution for the Suez Canal, and as soon as possible. With the Suez Agreement, the conflict between the two states appeared to be resolved peacefully. By June 1956 all British troops had withdrawn. But when Egypt nationalized the Suez Canal on July 26th, the Suez Crisis occurred .