European judges could be allowed to rule on disputes involving Gibraltar under a new Brexit deal, UK ministers have admitted.
Under the agreement, the territory will also have to follow some EU rules in order to secure a more open border with Spain, the Foreign Office said.
The Foreign Secretary Lord Cameron is leading negotiations with the EU in regards to a new deal to end a four-year political impasse.
A deal including Gibraltar is required as it was not included in the wider EU-UK trade pact struck in 2019.
Gibraltar could be forced to bow down to EU rules, UK ministers admit, as they hand power to European judges
Getty/PA
Last month, officials announced that they had agreed on the "core elements" of a potential deal and Madrid is understood to be pushing for the treaty to be signed before the European Parliament elections on June 6.
Conservative MPs are alarmed over the concessions, with the UK minister for Gibraltar David Rutley stating that defending the sovereignty of the British Overseas Territory was a "red line".
He said: "The UK will only reach an agreement with the EU on Gibraltar which the Government of Gibraltar is content with, which safeguards Gibraltar's sovereignty and which fully protects the operations and independence of the UK's military facilities in Gibraltar."
Robbie Bulloch, the Foreign Office mandarin leading the negotiations, said that the European Court of Justice (ECJ) would have more influence on the territory under the proposed deal.
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A deal including Gibraltar is required as it was not included in the wider EU-UK trade pact struck in 2019
GettyHe said that whilst he would not enforce the "direct application" of EU rules, some cases may require a "referral".
A key element of the Brexit campaign back in 2016 was to end the powers of the ECJ over the UK.
Sir Bill Cash, the chairman of the committee, warned ministers that the UK's role in Gibraltar was "a fundamental question and it relates directly to sovereignty".
David Jones, a former Brexit minister, said: "We're talking about, it seems to me, a significant diminution of British sovereignty that the Government is quite happy, apparently, to play along with."
The Rock of Gibraltar pictured from the seaPAGibraltar is technically out of the EU’s customs union, however, Madrid has granted a temporary exemption for workers and holidaymakers - leaving the headland in a state of limbo since Brexit.
Spain could retract the deal at any point, so the current negotiations are aiming towards agreeing common travel between Gibraltar and the Schengen zone.
The European Union and Spain have recently resumed their longstanding plans to make Gibraltar’s airport a point of access for travellers into southern Spain, which would see it join the Schengen Zone.
Some also believe that joint ownership of the airport would negatively impact the UK’s military, as the airstrip is shared between the commercial airport and the RAF base.
Margaritis Schinas, a Vice-President of the European Commission, caused controversy when last month he claimed that Gibraltar "is Spanish".
José Manuel Albares, Spain's Foreign Minister however dismissed the comments as "incomprehensible".
