Negotiations over the post-Brexit future of Gibraltar are deadlocked on the issue of security at the territory’s airport, raising fears of a deepening stand-off between Britain and Spain on the contentious issue of the The Rock.

Sources on the UK and Gibraltar side of the negotiations said that Spain had touched a “red line” with its demands to have police stationed at the airport which is partially situated on a disputed isthmus that links the territory with mainland Spain.

“The Spanish crossed a red line,” said a source with knowledge of the talks which started this year in a bid to avoid a last-minute stand-off over Gibraltar. “They want to get their Guardia Civil and police into Gibraltar and we’re not having it.”

The issue of Gibraltar threatens to hold up any Brexit deal after the EU granted Spain a de facto veto over whether the Withdrawal Agreement applies to Gibraltar.

Theresa May has promised Gibraltar will not be left out of the Withdrawal Agreement, giving Madrid strong negotiating leverage to extract concessions from Britain, including over joint control of the airport and creating a level-playing field on tax issues.