The country’s foreign minister said Spain would not back the proposals at the European Council unless it received assurances that the agreement would not apply to Gibraltar.
But Downing Street said it would not exempt Gibraltar or any other British territory from the agreement – putting the two governments on a collision course ahead of the meeting this weekend.
“The negotiations between Britain and the EU have a territorial scope that does not include Gibraltar, the negotiations on the future of Gibraltar are separate discussions,” Spanish foreign minister Josep Borrell said on Monday morning in Brussels.
“This is what needs to made clear, and until it is clarified in the withdrawal agreement and in the political declaration on the future relationship, we cannot give our backing.”
Spain has long resented Britain’s ownership of Gibraltar, a British Overseas Territory that is home to around 30,000 people – and has previously threatened to use Brexit to wrest concessions on the issue. Spain rejects Britain’s claim to the territory, which has been held as a British territory since 1704.
The issue of the enclave is also controversial with the public in Spain and successive governments have benefited politically by grandstanding on the issue.
The withdrawal agreement has to be approved by qualified majority voting at the European Council, meaning that if other countries add their voices of dissent to Spain’s, the agreement could be in trouble.
Additionally, last year Spain got a special clause included in the Council’s Brexit guidelines stating that “no agreement between the EU and the United Kingdom may apply to the territory of Gibraltar without the agreement between the Kingdom of Spain and the United Kingdom”. This was widely interpreted at the time as a veto.
The bloc has so far publicly stressed its unity in dealings with the UK, though it is understood that some other countries have problems with the future relationship proposals in areas such as fishing rights – fearing too many concessions may have been granted to Ms May’s government.
Spain also has an absolute veto over any future trade deal between the EU and UK – an issue on which it would be possible for the country to make trouble down the line.
Pedro Sanchez, the Spanish prime minister, had previously said in October that the issue of Gibraltar was resolved and “will no longer be a problem”.
However, at the time he also said Britain and Spain were still holding separate bilateral talks regarding Gibraltar, focusing on matters such as workers’ movements across the border, environmental issues and tax affairs.
Last month the sideline negotiations about the territory were said by the British side to be “95 per cent there”.
If the Spanish government does manage to reopen the withdrawal agreement, the changes will inevitably draw protests from Brexiteers – who also want to change it, but have been told they must live with the document as it is currently constituted.
Spanish representatives are understood to have explicitly demanded amendments to Article 184 of the agreement at a meeting of European affairs minister in Brussels.
But a Downing Street spokesperson ruled out any kind of concessions, telling reporters: “The draft withdrawal agreement agreed last week covers Gibraltar.
“The prime minister has been clear that we will not exclude Gibraltar or the other overseas territories or the Crown dependencies from our negotiations on the future relationship. We will get a deal that works for the whole UK family.”
Polls suggest the inhabitants of Gibraltar overwhelmingly want to keep their status as a British overseas territory and do not want to be a part of Spain.
The Independent has launched its #FinalSay campaign to demand that voters are given a voice on the final Brexit deal.