Gibraltar may be the next diplomatic battle in Brexit talks. London fears Madrid wants to drag Gibraltar into Brexit transition talks British government fears Spain wants a veto on how a Brexit transition affects Gibraltar.

LONDON — Is Spain about to pull a fast one?

That was the concern in London Monday night as whispers reached the U.K. government that Madrid is trying to drag Gibraltar into discussions on a transition period after Brexit, according to a senior government official.

The Spanish government scored a diplomatic victory at the outset of the Brexit talks by convincing the rest of the EU27 to give Madrid an effective veto on the future U.K.-EU trade relationship and how it affects Gibraltar.

But until now the U.K. thought this only affected the future relationship which will be signed after Britain has left the EU.

London insists the Article 50 “divorce” treaty — which is expected to include the transition period and will be signed while the U.K. is still a member of the EU — must treat the U.K. and its overseas territories as one entity, effectively meaning that Britain and Gibraltar are equally covered by the agreement on the transition.

London now believes Spain is trying to negotiate a veto on how the transition affects Gibraltar, the official said.

On Wednesday, the European Commission will issue its draft negotiating mandate setting out how the transition will be negotiated, with the aim of formal directives being issued at the European Council in March.

British officials are concerned the Spanish are trying to water down what they feel has been a clear commitment not to bring Gibraltar into the exit talks.

There are two key sections in the Commission's Phase 1 guidelines which U.K. officials believe kept Gibraltar off the table in transition negotiations.

The first section says any transitional arrangements should be “a time-limited prolongation of Union acquis” — in other words, an extension of current European Union law, which treats the U.K. and its overseas territories as one.

The second section U.K. officials point to is more explicit. It states: “On the date of withdrawal, the Treaties will cease to apply to the United Kingdom, to those of its overseas countries and territories currently associated to the Union, and to territories for whose external relations the United Kingdom is responsible.”

One U.K. official said: “If Britain's overseas territories aren't included in the transition guidelines it would be a total contradiction in the EU's own position.

“The April guidelines made clear that the Article 50 negotiations applied to our overseas territories, and that transition is part of that process."

One EU official said an announcement would be made on Wednesday, when the draft negotiating mandate is released. Another EU official, while declining to comment on the U.K.’s allegations, said that nothing had changed in the EU position since the original negotiating guidelines were issued in April.

Spanish Prime Minister Mariano Rajoy, speaking after the conclusion of Friday’s European Council summit, said he was pushing for the same conditions on Gibraltar to apply to any deal on a transition period.

“What we have agreed is that whatever future agreement between the United Kingdom and the European Union to be applied to Gibraltar must have an agreement of Spain and the United Kingdom,” Rajoy said at a news conference. “And so, what we have asked is that this is also applied to the transition period, not only to the future relationship, obviously, but also to the transition period too. And this appears in today’s conclusions as an inspirational principle. These are complex, technical issues.”