Britain's foreign secretary Mr Jack Straw has said Britain is prepared to share sovereignty of Gibraltar with Spain, under plans to be put to the Rock's voters.
Mr Straw said the "only way of seeking for Gibraltar a stable and prosperous future is through a comprehensive and permanent settlement of this dispute with Spain".
The British foreign secretary said London and Madrid were in broad agreement on a number of principles, "including that Britain and Spain should share sovereignty of Gibraltar".
Mr Straw said the proposals would give "greater freedom for the people of Gibraltar to make decisions".
Mr Straw told the House of Commons in London the decision "rests on the people of Gibraltar" in a referendum on the plan.
Shadow foreign secretary Mr Michael Ancram described the statement as "a disgrace" and one with very deep implications.
Mr Ancram said the statement was an admission that the British and Spanish governments were in broad agreement to share sovereignty. "This is what we have feared has longed been cooked up in the dishonourable talks - a shabby and dishonourable process."
PA
