Spain is launching a charm offensive on Gibraltar, aimed at breaking down resistance in the British colony to a sovereignty-sharing agreement between Spain and the UK.
Jack Straw, the British foreign secretary, is due in Madrid on Wednesday to discuss Spain's new approach to a 300-year-old dispute. It is Mr Straw's first visit since a new Socialist government took office in Spain in April.
Negotiations over the future of the British colony came to a rude halt in November 2002, when Gibraltar's 30,000 residents voted overwhelmingly against joint British-Spanish rule.
The Spanish foreign ministry says that while the referendum had no legal validity, it cannot be ignored. Miguel Angel Moratinos, Spain's new foreign minister, is proposing to put the sovereignty issue on the back burner, while sponsoring a series of ?trust-building? measures between Gibraltar and surrounding Spanish towns in the Bay of Algeciras, with a population of 240,000.
Mr Straw and Mr Moratinos are expected to announce an agreement on the joint commercial use of Gibraltar's airport. Other agreements, on water supplies and waste disposal for the British colony, bus routes, and the use of schools and hospitals on the Spanish mainland, are expected to follow.
The Spanish foreign ministry says it is also willing to find solutions to a number of ?technical hitches? relating to Gibraltar, which are currently impeding Britain from taking part in the law enforcement and judicial co-operation aspects of the Schengen agreement.
According to British officials, the UK is anxious to sign up to parts of the Schengen agreement to increase co-operation in the fight against terrorism and organised crime, but progress has been complicated by Spain's claim on Gibraltar.
Spain also continues to challenge Gibraltar's special status as an offshore financial centre, which Madrid believes facilitates tax evasion and money-laundering.
Over time, Spanish diplomats hope co-operation on practical matters will make the sovereignty issue irrelevant although Spain insists it will never renounce its claim on the rock. Peter Caruana, chief minister of Gibraltar, has welcomed the new Spanish initiative.