The British Government came within a day of doing a controversial deal to share the sovereignty of Gibraltar with Spain and end 300 years of conflict over "The Rock".
Tony Blair and the then Foreign Secretary Jack Straw were both keen to do a deal over Gibraltar to "help ourstrategic relationship" with Spain, according to a new book.
The then Europe Minister Peter Hain reveals in his memoirs that secret talks with the Spanish Government broke down when the Spanish got "cold feet" over the agreement.
The book, Outside In, also reveals the Government was deeply concerned about "money laundering, tax evasion, drug trafficking and crime" associated with Gibraltar and had little sympathy for local politicians who insisted that the constitutional arrangements should not be altered.
"Jack's desire to do something about Gibraltar coincided with my gut instinct that it was ridiculous in the modern age for Britain to have a colony on the tip of Spain nearly 2000 miles [3200km] away," he writes.
He adds that Blair told him: "It is really important to secure a better relationship with Spain and to remove it [Gibraltar] as an obstruction to our relations within Europe." He writes that Blair, Prime Minister at the time, was contemptuous of Gibraltarian attitudes and insistent upon making a deal that could move the situation forward.
Hain says despite vehement opposition from Peter Caruana, the Chief Minister of Gibraltar, he went ahead with negotiations in Madrid. "To our astonishment, as the evening arrived, we realised we had a full agreement ... and accepted co-sovereignty could not open the door to full Spanish sovereignty."
Talks then foundered and no further progress has been made subsequently.
