Historic deal on Gibraltar will open up colony and boost trade

Britain and Spain are set to sign a historic deal over Gibraltar which will end decades of enmity over the tiny Mediterranean colony.

Geoff Hoon, Europe minister; the Spanish Foreign Minister, Miguel Angel Moratinos, and Peter Caruana, Gibraltar's First Minister, are expected to seal the first tripartite deal over the Rock. At a summit in the southern Spanish city of Cordoba today, the agreement will open up Gibraltar airport to flights from Spain and the rest of Europe for the first time.

Border controls will also be relaxed in an effort to stimulate trade between Gibraltar and Spain. Telecommunications between the Rock and Spain will be improved, allowing mobile telephone users to make calls from Spain to Gibraltar.

Pension rights for Spaniards who worked in Gibraltar until the border was closed by General Francisco Franco in 1969, will also be settled.

But the thorny issue of sovereignty, which Spain has claimed since it ceded the Rock in 1713, will not, however, be up for discussion.

The agreement is the fruit of an initiative on the part of Spain's Socialist Prime Minister Jose Luis Rodriguez Zapatero. Mr Zapatero weathered domestic political criticism to do a deal with Britain and - for the first time, Gibraltar - without insisting that sovereignty would have to be part of the package.

A British diplomatic source said yesterday: "It was a valiant step from Zapatero not to attach sovereignty as part of the deal in order to get progress for Spaniards."

At present Gibraltar can appear a strange place to some visitors, with red telephone boxes and British police officers among the backdrop of a rocky Mediterranean outcrop.

But the new agreement will bring the Rock a little closer to the rest of Europe. It will allow for two channels at the border, instead of the one which exists at present. This will mean a "nothing to declare" channel will free up traffic and end the jams.

The agreement will also encourage the Spanish telecommunications company Telefonica to allow roving rights for anyone with a Gibraltar mobile.

And 6,000 Spanish workers, whose pensions were frozen at 1989 rates in a complicated row with Britain, should see their full pensions restored.

The symbolic importance of Gibraltar and Spain coming to a first direct agreement will not be lost on the Spanish conservative opposition Popular Party, which wants sovereignty returned to Madrid more than 300 years after it was handed to Britain in the Treaty of Utrecht. The deal does not mean Spain will drop its claim to sovereignty. Any hope Spanish nationalists might have to restore the Rock to Spain were dashed in 2002 when 99 per cent of Gibraltarians voted to remain British.