CUBAN President Raul Castro called on his US counterpart Barack Obama on Wednesday to end sanctions as the two countries prepared to restore diplomatic relations.

Speaking to the Cuban parliament, Mr Castro also said that the US should hand back Guantanamo Bay, pay reparations for the economic damage caused by more than 50 years of sanctions and end hostile propaganda radio and TV broadcasts to Cuba.

Normal diplomatic relations between the two countries will be re-established on July 20 with the upgrading of the Cuban and US special interests sections in Washington and Havana to embassy status.

“A first stage of the process started on December 17 will end on that day and a new long and complex stage in the road to normalisation will start,” he said.

“As we have said, it is about founding a new kind of tie between both states, that is different from all our shared history.”

The Cuban president reaffirmed that as long as the economic, commercial and financial blockade was in force it was difficult to conceive of normal relations between Cuba and the US.

US acts of ­Congress have ­stipulated that the embargo cannot be lifted unless Havana compensates US companies for £4.5 billion in holdings that were nationalised following the 1959 revolution, despite acts of sabotage by some owners.

Mr Castro also declared that crucial to normalising relations would be the return to Cuban sovereignty of Guantanamo Bay, which has housed a US naval base and the notorious extra-legal prison camp since Washington signed a treaty with the pre-revolutionary government in 1903.

Halting programmes aimed at “promoting subversion and destabilising” the country, such as the US government-funded Radio and Television Marti, ironically named after the Cuban national liberation hero, was also needed.

Asserting the nation’s independence in the face of US demands for an abandonment of socialist principles, Mr Castro said: “Changing whatever needs to be changed is a sovereign matter and exclusive to the Cubans.”