British Prime Minister Theresa May on Sunday gave assurances to Gibraltar Chief Minister Fabian Picardo by phone, to allay concerns that Spain may use its apparent veto power in Brexit negotiations.

It has become one of the early flashpoints in Brexit negotiations which started last week after May triggered Article 50, the process for leaving the European Union, Xinhua news agency reported.

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An official spokesman said: "The Prime Minister reiterated our long-standing position that the UK remains steadfastly committed to our support for Gibraltar, its people and its economy."

"The Prime Minister said we will never enter into arrangements under which the people of Gibraltar would pass under the sovereignty of another state against their freely and democratically expressed wishes," said the spokesman.

"She said we remain absolutely dedicated to working with Gibraltar for the best possible outcome on Brexit, and will continue to involve them fully in the process," the spokesman added. 

Gibraltar, located on the southern tip of the Iberian Peninsula at the entrance of the Mediterranean, was ceded to Britain as part of the Treaty of Utrecht in 1713. Spain has persistently sought to regain the tiny southern territory. 

A row has erupted after draft Brexit negotiating guidelines drawn up by the European Council identified future arrangements for Gibraltar, which is home to about 30,000 people as one of its 26 core principles.

That clause has potentially put Britain and Spain on a collision course over the future of this area.