MercoPress. South Atlantic News Agency

Heath was ready to give Madrid Gibraltar sovereignty.

The Daily Telegraph published last week that Edward Heath Conservative government was prepared in 1973 to hand Gibraltar over to the Spanish in a deal with General Franco's regime according to documents revealed under the British 30-year disclosure rule.

"Colonial anachronisms have been cleared up over most of the world. Gibraltar is the only one left in Europe", wrote the British Ambassador to Madrid of the time.

The article written by Peter Day and filed last August 3 follows:

"Ted Heath's Tory government was prepared to hand Gibraltar over to the Spanish in a deal with General Franco's regime, documents revealed under the 30-year rule have disclosed.

Files from the National Archives show that in 1973 the Prime Minister was not only prepared to give up sovereignty but that officials fully expected the problem to be absorbed by a European political and defence union.

The ambassador to Madrid, Sir John Russell, said of the Rock: "We cannot go on defending this historical and geographical anomaly. Colonial anachronisms have been cleared up over most of the world. Gibraltar is the only one left in Europe."

Sir Alec Douglas Home, the Foreign Secretary, was drawing up arrangements for conceding sovereignty yet simultaneously maintaining Britain's presence and Gibaltarian autonomy by means of a leaseback deal.

The stumbling block was that the 26,000 Gibraltarians would never agree, so towards the end of 1973, Julian Amery, the foreign minister, was deployed to discuss secretly a softening-up process. He would offer British support for eventual Spanish membership of Nato and the EEC, which Britain had joined that year.

In return Spain would relax its border restrictions and be granted economic and cultural access to the Rock and begin to win over the inhabitants, who deeply distrusted Franco's dictatorship.

Sir John had started the ball rolling in April 1973, writing to the Foreign Office: "We should show we are ready to help them with their EEC problem, but at the same time let them understand that we would find this easier to do if they could cool it over Gibraltar."

In notes for Mr Amery, Alan Goodison, head of the Foreign Office's southern European department, wrote: "We hope that within 10 years the European Community will become a political and defence union. When that time comes Gibraltar will be neither British nor Spanish. It will be European."

Relations cooled the following year, with Harold Wilson's Labour government returning to power, but after Franco's death in 1975 Britain supported Spain's application to join the EEC and Nato, and Spanish restrictions on Gibraltar were lifted".