The British government took a symbolic step yesterday towards resolving the 300-year-old dispute with Spain over Gibraltar by announcing that it was prepared to share sovereignty with Madrid, but the idea was instantly rejected by the colony's leader.
Almost at the same time as Mr Straw was making his surprise announcement in the House of Commons, Gibraltar's chief minister Mr Peter Caruana was calling for an end to the talks "because of their obvious failure."
The two governments had agreed on Thursday to postpone yesterday's planned visit to Madrid by Mr Straw. The new Spanish Foreign Minister, Ms Ana del Palacio, only took over her new position two days ago, and would have had less than 24 hours to prepare for the meetings. Many believed the postponement gave both sides a face-saving way of avoiding admitting that their talks had reached deadlock.
After 12 months of talks, some broad principles had been agreed, Mr Straw told parliament, amid angry protests from many Conservative MPs and some on his own side as well. But the move, while a significant statement by the British government, is unlikely to help the two sides overcome long-standing sticking points.
Diplomats say Spain and Britain agreed in principle to share sovereignty some time ago, but that talks had become bogged down over how long this should last.
Britain wants any deal reached to be a final solution but Spain has repeatedly said it will not give up its claim to ownership of the rock and opposes any referendum by Gibraltarians, fearing it will set a dangerous precedent for restive Spanish regions such as the Basque country.
Britain for its part has set out its own "red line" beyond which it will not budge - insisting it will retain control of Gibraltar's military base, a convenient shelter for its submarines.
In Madrid, a Spanish foreign ministry spokesman said of the plan: "We consider it positive news." But Spaniards on the streets of the city said it could never settle the dispute. "It's not a solution. A country can't be two countries at once," said Mr Jesús Polo (24), a student. Mr Alvaro Baon, a banker, said: "It's fine as a step to Spanish sovereignty."
Among Britons, Mr Straw's statement sparked outrage on all sides - with members of his own Labour Party, opposition Conservatives and Gibraltarians all slamming the idea.
Conservative foreign affairs spokesman, Mr Michael Ancram said it was "a disgrace", while a former Labour minister, Mr Gerald Kaufman, said the idea was a "sell-out" and told Mr Straw: "I never thought the day would come when you would make a statement practically every word of which I disagree with."
In Gibraltar, Mr Caruana asked: "If sovereignty means anything at all, how can you possibly share it with anybody?"
Mr Straw said a year of talks had produced broad agreement on the principles that Gibraltar should have more self government, keep British traditions and its citizens should retain the right to British nationality as well as gaining the right to Spanish nationality.
He stressed any decision lay with Gibraltar's 30,000 people, who would vote in a referendum if both countries reached a deal.
(Additional reporting Reuters)