<P> By the start of the 20th century, Germany and the United States had begun to challenge Britain's economic lead . Subsequent military and economic tensions between Britain and Germany were major causes of the First World War, during which Britain relied heavily upon its empire . The conflict placed enormous strain on the military, financial and manpower resources of Britain . Although the British Empire achieved its largest territorial extent immediately after World War I, Britain was no longer the world's pre-eminent industrial or military power . In the Second World War, Britain's colonies in Southeast Asia were occupied by Japan . Despite the final victory of Britain and its allies, the damage to British prestige helped to accelerate the decline of the empire . India, Britain's most valuable and populous possession, achieved independence as part of a larger decolonisation movement in which Britain granted independence to most territories of the empire . The transfer of Hong Kong to China in 1997 marked for many the end of the British Empire . Fourteen overseas territories remain under British sovereignty . </P> <P> After independence, many former British colonies joined the Commonwealth of Nations, a free association of independent states . The United Kingdom is now one of 16 Commonwealth nations, a grouping known informally as the Commonwealth realms, that share a monarch, Queen Elizabeth II . </P> <P> The foundations of the British Empire were laid when England and Scotland were separate kingdoms . In 1496, King Henry VII of England, following the successes of Spain and Portugal in overseas exploration, commissioned John Cabot to lead a voyage to discover a route to Asia via the North Atlantic . Cabot sailed in 1497, five years after the European discovery of America, but he made landfall on the coast of Newfoundland, and, mistakenly believing (like Christopher Columbus) that he had reached Asia, there was no attempt to found a colony . Cabot led another voyage to the Americas the following year but nothing was ever heard of his ships again . </P> <P> No further attempts to establish English colonies in the Americas were made until well into the reign of Queen Elizabeth I, during the last decades of the 16th century . In the meantime the 1533 Statute in Restraint of Appeals had declared "that this realm of England is an Empire". The subsequent Protestant Reformation turned England and Catholic Spain into implacable enemies . In 1562, the English Crown encouraged the privateers John Hawkins and Francis Drake to engage in slave - raiding attacks against Spanish and Portuguese ships off the coast of West Africa with the aim of breaking into the Atlantic slave trade . This effort was rebuffed and later, as the Anglo - Spanish Wars intensified, Elizabeth I gave her blessing to further privateering raids against Spanish ports in the Americas and shipping that was returning across the Atlantic, laden with treasure from the New World . At the same time, influential writers such as Richard Hakluyt and John Dee (who was the first to use the term "British Empire") were beginning to press for the establishment of England's own empire . By this time, Spain had become the dominant power in the Americas and was exploring the Pacific Ocean, Portugal had established trading posts and forts from the coasts of Africa and Brazil to China, and France had begun to settle the Saint Lawrence River area, later to become New France . </P>

What were britain's 3 major colonies in 1800