The UK and Spain say their talks on the future of Gibraltar will go on, despite the Rock's resounding rejection of shared UK-Spanish sovereignty.

It is a referendum with no legal value, to which no great importance should be attached

Mariano Rajoy, Spanish Deputy Prime Minister

Nearly 99% of those who voted in a referendum on Thursday said they were against the idea - a result which Chief Minister Peter Caruana said London and Madrid would ignore "at their peril".

But a spokesman for UK Prime Minister Tony Blair said "there are real issues which cannot be run away from, and they have to be discussed with the people of Gibraltar and the Spanish".

Referendum result

Yes: 187 votes (1.03%) No: 17,900 (98.97%) Turnout: 18,176 (87.9%)

He added: "The key question is how do we ensure a more prosperous future for Gibraltar, how do we resolve the real practical issues and how do we work with the Spanish Government to resolve those issues."

Spanish First Deputy Prime Minister Mariano Rajoy told a news conference in Madrid that the referendum was of "no great importance" or legal value.

"What is important to us now, and what we are going to work hard on in the days to come, is continuing the talks," he said.

Political punch

The referendum was called by Mr Caruana after a 12 July statement by UK Foreign Secretary Jack Straw that London and Madrid had agreed in principle on sharing sovereignty.

We expect there will be further meetings but no date has been set as yet

UK Foreign Office

However, the UK authorities have continued to insist that no deal will be forced on the people of Gibraltar without their consent.

Mr Caruana said in a victory speech that the overwhelming vote had kicked the idea of joint sovereignty "into the long grass".

Correspondents say that although the vote had no legal weight, it carried considerable political punch, and makes a deal to end the 300-year tug of war over Gibraltar harder to reach.

The UK Foreign Office said on Friday that Mr Straw and his Spanish counterpart, Ana de Palacio, "will have to consider how to proceed in the light of this vote", but that further meetings were expected to take place.

'Worst of all worlds'

Gibraltar refuses to take part in the talks unless it is given an equal voice.

In his July statement to parliament, Mr Straw made clear that there were outstanding issues that remained to be resolved and correspondents say there has been little sign of progress over the summer.

Spain is reluctant to accept shared sovereignty as a permanent solution, nor does it want Gibraltar to have the final say.

A report by UK parliamentarians on Thursday criticised the government for discussing joint sovereignty with Spain when it ought to have been obvious from the start that Gibraltarians would reject any such deal.

It said the talks could only lead to the "worst of all worlds - the dashing of raised expectations in Spain and a complete loss of trust in the British Government by the people of Gibraltar".