The government of Gibraltar has accused Spain of introducing a ban on construction materials entering the British Overseas Territory.
Gibraltar said Spain was "denying export permission" for rock, sand and aggregate destined for building projects, and said it was considering legal action. It also threatened an official complaint to the European Commission if the "illegal and anti-European" restrictions were not lifted.
The news came as Foreign Secretary William Hague met Gibraltar's chief minister Fabian Picardo in London to discuss the continuing border row with Spain.
The two met to start a series of discussions including "the unacceptable delays at the Spanish/Gibraltar border", the Foreign Office said.
In a statement, the Gibraltar government said: "HM Government of Gibraltar notes that the Spanish authorities are now denying export permission for the supply of rock, sand and aggregate destined for projects in Gibraltar.
"The Government of Gibraltar has already identified alternative sources of supplies and will shortly be finalising these alternative arrangements.
"As a result, there should be no delay to the envisaged works on any project as a result of these illegal and anti-European restrictions
"The chief minister, the Hon Fabian Picardo MP, will raise also this issue with the Foreign Secretary, in addition to the many other instances of illegal action being taken by the Spanish government at the frontier and at sea.
"Legal action and the necessary complaints to the EU Commission will follow if the restrictions in question are not removed."
The Foreign Office said today's meeting between Mr Hague and Mr Picardo was "reaffirming the strong bonds between the UK and Gibraltar and the UK's commitment to stand by the people of Gibraltar".
The export ban is the latest move in the row over an artificial reef sunk in Gibraltar waters which prompted Spain to introduce border checks on traffic, which have led to delays of several hours.
The row over the reef, which Spain claims disrupts waters frequented by its fishing boats, has continued to simmer in recent days.
Last Friday a group of divers from a Spanish Guardia Civil unit entered Gibraltarian waters and inspected the concrete reef. Pictures posted online showed them unfurling a Spanish flag at the seabed.
The move was criticised by the Gibraltar government, which said the "serious incursion will not assist" in de-escalating the present tensions.
A regional politician also sparked anger by reportedly posting online a cartoon showing Spanish troops in Gibraltar and the Spanish flag flying over the Rock.
Last week more than 40 commercial Spanish boats staged a protest over the reef before being removed from Gibraltarian waters by police and Royal Navy patrol boats.
European Commission observers are to visit the border crossing to assess the legality of the checks on traffic after Spanish prime minister Mariano Rajoy agreed to allow them access following talks with Commission president Jose Manuel Barroso.
Three Royal Navy ships, led by frigate HMS Westminster, visited Gibraltar for a routine stopover last week en route to naval exercises in the Mediterranean.
Additional reporting PA