No agreement is better than a bad agreement

Foreign Office source

Foreign Secretary Jack Straw discussed the disputed colony with his Spanish counterpart Josep Pique in a meeting at the European Union gathering in Valencia on Tuesday.

In a written Parliamentary answer published on Wednesday, Foreign Office minister Peter Hain said it remained the government's ambition to reach a deal with the Spanish by the summer - "if possible".

Mr Hain said: "Our objectives remain to preserve Gibraltar's way of life, establish greater self-government, deliver lasting practical benefits and a stronger economy, and secure a lasting agreement on sovereignty so that Gibraltarians can enjoy security for their way of life."

Agreement had been expected to be agreed by the summer but this no longer seems a done deal.

Opposition

A Foreign Office official said: "We are making progress, but it is real negotiation. It is difficult and it is not a foregone conclusion that we will reach an agreement.

"It is kind of make your mind up time now for the Spanish.

"No agreement is better than a bad agreement and they are not going to apologise for defending Gibraltar's interests or our interests."

Gibraltarians have so far voiced loud opposition to any change in their status, making their feelings know with mass demonstrations.

Spain has been trying to get the Rock back ever since it ceded Gibraltar to Britain nearly three hundred years ago.

It is unlikely to give up its claim, so a deal will have to be crafted which allows Spain to keep face.

A Foreign Office spokesman said the government was working to ensure that the deal their reached was "durable".

The Conservatives have accused the government of conducting the negotiations in secret.