Britain's Cameron Warns Spanish PM over Gibraltar Spat

British Prime Minister David Cameron on Wednesday warned his Spanish counterpart that the escalating tit-for-tat over border tensions in Gibraltar risked damaging relations between their countries.

Cameron and Mariano Rajoy discussed ways to calm the situation in a call Britain described as "constructive" after tensions rose at the weekend when Spanish Foreign Minister Jose Manuel Garcia-Margallo threatened to impose steep tolls to cross the border.

Long queues of vehicles built up at the border between Gibraltar and mainland Spain on Wednesday, an Agence France Presse photographer reported.

That echoed problems at the end of July when Spanish border guards searched every vehicle entering the peninsula, creating delays of up to six hours.

The British prime minister called Rajoy "to raise serious concerns about actions by the Spanish at the border with Gibraltar and suggestions... that they may introduce further measures," a Downing Street spokeswoman said.

"The PM made clear that our position on the sovereignty of Gibraltar and its surrounding waters will not change.

"He also reiterated, as the PM and Mr Rajoy had previously agreed, that the issue should not damage our bilateral relations. However there was a real risk of this happening unless the situation at the border improved.

"Mr Rajoy agreed that he did not want the issue to become an obstacle in the bilateral relations and that we needed to find a way to de-escalate the issue."

Gibraltar has accused Spain of deliberately creating border hold-ups in retaliation for the tiny British overseas territory dumping concrete blocks in the sea to create an artificial reef.

Gibraltar says it wants to create an ecological reef, but Madrid claims it is a deliberate bid to impede Spanish fishing vessels in the dispute over territorial waters.

Tensions rose further when Garcia-Margallo suggested Madrid could impose a 50-euro ($66) charge to cross the 1.2-kilometer frontier in either direction, which would affect the thousands of people who make the trip every day.

Spain ceded Gibraltar to Britain in perpetuity in 1713 but has long argued that it should be returned to Spanish sovereignty. London says it will not do so against the wishes of Gibraltarians -- who are staunchly pro-British.

The internally self-governing British overseas territory, measuring just 6.8 square kilometers (2.6 square miles), is home to about 30,000 people.

Gibraltar has a significant offshore banking sector and a booming reputation as an online gaming hub.

The peninsula on Spain's south coast, dominated by the giant limestone Rock of Gibraltar, is strategically important as it overlooks the only entrance to the Mediterranean Sea from the Atlantic Ocean.

Rajoy described the "unilateral act of installing concrete blocks" in the Bay of Gibraltar as "unacceptable", his office said in its version of the conversation with Cameron.

He called for two-way dialogue "framed in respect of international, European and national law".

Britain and Spain are "partners, friends and allies", Rajoy said, so any disputes would have to be handled with "honesty and transparency".

London said Rajoy had also "committed to reducing measures at the border. Both leaders agreed that there should be a solution to the fishing dispute".

The leaders agreed that Garcia-Margallo and his British counterpart William Hague would take the dialogue forward and the pair spoke later Wednesday.

Hague said in a statement that the border delays were "disproportionate".

Spain meanwhile said the two countries would create "ad-hoc working groups" to find a solution.

Madrid says the artificial reef will destroy the fishing grounds and has provoked concern in Spain about the damage to the environment and the fishing industry.

Hague said the territory was committed to "sustainable fishing".

"These matters are within the constitutional competence of Gibraltar and show Gibraltar's genuine willingness to resolve the fishing dispute," he said.

Adding to the strains in relations, Gibraltar police said they had arrested three Spaniards on a fishing boat who were suspected of tobacco smuggling.

Three Gibraltarians were also arrested on a beach nearby.

The arrests were "unrelated to any fishing or nature protection legislation matters," the police said, dismissing any connection with the dispute over fishing rights.

It also emerged that Gibraltar had received a message of support from the government of the Falklands, the British-held islands in the South Atlantic which are claimed by Argentina.

The European Commission said Tuesday it would send a team of monitors to the border to ensure controls were being applied "proportionately".