We will use your email address only for sending you newsletters. Please see our Privacy Notice for details of your data protection rights.

Sign up fornow and never miss the top politics stories again.

Germany will back an agreement on Sunday on Britain's withdrawal from the European Union, and hopes Spain's objection to wording over the disputed British territory of Gibraltar will be resolved imminently, Chancellor Angela Merkel said - a reaction which could shock Europe and Spain.

REVEALED: What Jeremy Corbyn REALLY thinks of the EU

Spanish Prime Minister Pedro Sanchez said today his government would vote against the EU's draft Brexit agreement if the included text on Gibraltar was not changed - putting the whole deal at risk.

Gibraltar is due to leave the European Union along with the United Kingdom in March, although 96 percent of its population voted in the 2016 referendum to remain in the bloc.

"We know how difficult the discussions are in Britain, but I can say for Germany that we will agree to this exit agreement," Merkel told German lawmakers today during a budget debate.

"We still have an objection in Spain. I can't say exactly how we solve this issue, but I hope it will be solved by Sunday."

The EU is due to hold a summit to discuss Britain's draft Brexit deal on that day.