David Cameron has said he is "seriously worried" by escalating tensions with Spain over Gibraltar.

The prime minister's concerns arose after Madrid said it was preparing to impose a €50 (£43) fee on the border crossing with the British territory as well as being ready to close airspace to planes using the Gibraltar airport and to investigate alleged smuggling over the border and the tax affairs of Gibraltarians with property in Spain.

"Clearly, we remain seriously concerned by the events at the Spain-Gibraltar border," a Downing Street spokesman said.

"Specifically on this issue of border fees, the Spanish have not raised the prospect of introducing border fees with us. We are seeking an explanation from them regarding reports that they might target Gibraltar with further measures."

The government was in close contact with the Spanish about the issue, but the spokesman refused to give further details.

No 10 seems to believe the sabre-rattling over border fees may prove to be theatrical. The EU has been trying to settle a dispute over fishing rights, but is not expecting a breakthrough in the short term and results may ultimately turn on whether the UK is willing to take Spain to court to clarify the legal position on the sovereignty of waters.

Cameron last spoke to his counterpart, Mariano Rajoy, about the issue at a European council meeting in June, before the latest row which has seen long delays at the Spanish border with Gibraltar, which was ceded by treaty to Briton in 1713.

Spain has claimed money raised by the border fee could be used to help Spanish fishermen who have lost out because of damage to fishing grounds allegedly caused by Gibraltarian authorities.

Fabian Picardo, Gibraltar's first minister, has described the measures outlined by the Spanish foreign minister, José Manuel García-Margallo, as reminiscent of the actions of North Korea. He said "hell will freeze over" before the authorities in Gibraltar would remove an artificial reef which Madrid claims is harming the livelihoods of Spanish fishermen. Any border fees would violate European Union rules on freedom of movement rules, he added.

"What we have seen this weekend is sabre-rattling of the sort that we haven't seen for some time," Picardo told BBC Radio 4's Today programme. "The things that Mr García-Margallo has said are more reminiscent of the type of statement you'd hear from North Korea than from an EU partner.

"We've seen it before during Franco's time during the 1960s but I think all of us hoped that those politics were never going to come back and that the much more enlightened politics of Mr [Miguel Ángel] Moratinos, who was the previous but one foreign minister of Spain, would prevail, which talked about people working together and creating economic benefits for the citizens on both sides of the frontier rather than the belligerence we are seeing now."

Dominique Searle, editor of the Gibraltar Chronicle, said: "The fishing issue is the excuse but what Margallo is up to is creating a distraction from the corruption scandals and the state of the economy [in Spain]. Mostly it's just noise. It was inevitable they would make an issue on the 300th anniversary of the Treaty of Utrecht.

"The fishing issue isn't about fish, it's about sovereignty. It could have been resolved by talking to the fishermen. The reality is that unemployment in La Línea [the Spanish town on the border] is 40%. The smuggling people do there is small scale. These are just working-class people, they don't need this sort of problem.

"As for the claim that 6,000 Gibraltarians own second homes in Soto Grande [in Andalucia], that's just ridiculous. There aren't that many people here with that kind of money."

Labour's Foreign Office spokeswoman, Kerry McCarthy, said the prospect of Spain using a "transit fee as a bargaining chip with the UK" was unacceptable. "At this time of year, many of those people trying to cross the border are British holidaymakers and their families. It is wrong for the Spanish government to attempt to use the border crossing to score political points at their expense.

"Gibraltar's residents also make heavy use of the border crossing to reach their jobs and relatives in Spain. Any measure designed to penalise the residents of Gibraltar should be strongly rejected by the Foreign Office."

Spain's main opposition party, the Spanish Socialist Workers party, criticised what it said was "an escalation of bravado" between the governments of Spain and Gibraltar.

Juan Moscoso del Prado, its spokesman for EU affairs, accused García-Margallo of "dynamiting" dialogue on issues which affected workers, fishermen and others. In an interview with Canal Sur radio station reported by the Europa Press news agency, he said: "You cannot threaten €50 fees when there are more than 10,000 people who go there every day to work. Workers should not be taken hostage by this conflict."