Spain is demanding new reassurances from Brussels over the status of its Brexit ‘veto’ over Gibraltar, raising fresh fears that the issue could derail the Brexit negotiations at the eleventh hour, the Telegraph can reveal.

Three European diplomatic sources confirmed that Spain’s new socialist government is demanding that this week’s European Council conclusions explicitly reference the need for a solution for Gibraltar before any deal applies to the Rock.

The Spanish intervention comes as talks over Gibraltar and Brexit remain deadlocked after breaking down six weeks ago in a row over Spanish demand for joint policing of its airport.

At the time sources in Gibraltar said Spain had crossed the “red line” of UK sovereignty with their demands. “We have not progressed since then,” said a source with direct knowledge of the talks.

Spain was granted a “veto” over the Brexit process which said that the terms of the Withdrawal Agreement and transition deal would not apply to the territory of Gibraltar unless they were explicitly agreed bilaterally between London and Madrid.

Despite this, EU diplomatic sources confirmed that the Madrid remains angry that its Gibraltar veto does not have the same explicit status in the draft Withdrawal Agreement as similar paragraphs requiring solutions for Northern Ireland and Cyprus.