Gibraltar warned to support deal with Madrid

The Government hinted yesterday that Gibraltar would get much less help during border disputes with Spain if it rejected a power-sharing deal.

The Government hinted yesterday that Gibraltar would get much less help during border disputes with Spain if it rejected a power-sharing deal.

As Britain stepped up pressure on the colony last night, government sources in London revealed details of a blueprint based on an Anglo-Spanish agreement leading to the two nations holding joint sovereignty over the Rock. It could result in firm proposals as early as June.

They held out the prospect of economic growth and a big increase in self-government for its 30,000 residents if the 300-year dispute is finally settled.

Gibraltar will get a £35m package of EU-funded improvements if its people accept a compromise deal in a referendum on the colony's future.

The status of Gibraltar cannot be changed without the approval of a majority of its citizens. An estimated 24,000 of them took to the streets this week to demand that London abandon any move to power-sharing.

The final shape of an agreement with Madrid is still being negotiated, but is expected to guarantee Gibraltar's way of life, its legal system and its historic links with Britain.

A government source said last night: "This isn't a slippery slope towards Spanish sovereignty. Neither will it mean independence." The source pointed to Spanish willingness to ease controls on its border and to improve air and other transport links with colony.

Peter Hain, the minister for Europe, accused Gibraltar's government of a "lack of leadership" for its refusal to engage in talks on sovereignty. "There is a bright future out there for the people of Gibraltar to seize if they wish," he said.