Nato base at heart of Blair offer to Spain on Gibraltar

Britain made a significant concession to Spain in negotiations on Gibraltar yesterday, publicly floating a proposal to turn its military base on the Rock into a Nato facility open to all members of the alliance, including Spain.

The move was warmly welcomed by Spain as a sign that talks on shared sovereignty have not broken down.

An unexpected announcement by Gibraltar's chief minister, Peter Caruana, last night that the colony would hold a referendum on sovereignty before the end of October is the surest sign yet that the endgame is approaching in the long-running talks. Several recent developments have shown that negotiations widely believed to be stalled, if not moribund, have been proceeding and that Britain – if not Spain – has offered concessions on key points of disagreement.

While the desired deadline for an agreement "this summer" looks unlikely to be met, the prospect of a full agreement "in principle" by the autumn cannot be ruled out. And the change of foreign minister in Spain, with Ana Palacio replacing Josep Pique, far from delaying the talks, may actually have facilitated them.

Ms Palacio said yesterday that she would give no official response until the proposal on the naval base had been formally tabled, but she saw it as evidence of British goodwill.

"We'll wait for Britain to put their new proposals on the table before answering," she said. "But I think it's a sign of goodwill in the negotiations".

Ms Palacio was responding to remarks by Britain's Europe minister, Peter Hain, in an interview published yesterday in the Spanish newspaper El Pais. Mr Hain said that the Gibraltar naval base and airfield would be "converted into a Nato base... to which all Nato members would have access, including Spain... But British control must be maintained, and that's final".

Tony Blair last night denied such a move would represent a change in Britain's position.

"I don't think we have changed our mind at all," he said. "It remains under British control. If it is for Nato purposes, or any other purposes, it is only with British consent and British sovereignty."

Pressed to elaborate, Mr Blair said: "It is for us to decide, as Britain, what happens with this base, and there can't be any aggregation of that principle."

Mr Blair's emphasis was slightly different from Mr Hain's, but the inference was clear. Britain was open to an agreement that would allow Spain use of the military facilities under Nato auspices, so long as "control" remained technically with Britain.

Placing the base at Nato's disposal was the original solution proposed informally by Britain early in the talks with Spain. It appeared to have been scuppered by Britain's top brass, however, who had persuaded the Secretary of State for Defence, Geoff Hoon, that any change in its status could put "Britain's strategic interests at risk". He had placed these misgivings in a letter to the Foreign Secretary that was promptly leaked to the press.

The Nato solution now appears to be back on the table. With the principle of "shared sovereignty" agreed and announced by Jack Straw to the Commons two weeks ago, that leaves only one other major sticking point – aside from the opposition of Gibraltarians to any change – and that relates to the time-scale.

Britain has insisted that any agreement should be valid in perpetuity and non-negotiable. This would leave sovereignty over Gibraltar, in principle, shared between Britain and Spain for ever – although a long way into the future, demographic and economic changes might well produce a gradual transition from British to Spanish dominance.

Spain, however, has refused to accept that it would never recover sovereignty over Gibraltar and wanted the agreement couched rather as a leaseback arrangement, similar, say, to the one that applied to Hong Kong, with sovereignty being automatically transferred to Spain after a fixed term. However, remarks made by the British ambassador to Spain, Peter Torry, in a Spanish radio interview earlier this week suggested that Britain's position on this, too, might not be quite as unyielding as previous official statements had indicated.

Stressing that an agreement could not appear to be the first stage in the transfer of Gibraltar to Spain, he said that any arrangement had to be "durable". Asked what was the difference between "durable" and "permanent", Britain's usual formulation, he said: "Agreements can always change if the signatories want to change."