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Yesterday Gibraltar condemned the proposal of the Mayor of the bordering Spanish town of La Linea, to impose a tax on cars entering and leaving the tiny British territory.
The Mayor of La Linea, Alejandro Sanchez, announced that a congestion charge of no more than four pounds would be made on cars crossing into and out of Gibraltar, saying how the proposal will be implemented in October once it has been passed by the town council.
He said lorries carrying debris and other materials used in Gibraltar to reclaim land from the sea will pay more, but the exact amount is still to be decided.
Sanchez, a member of Spain's conservative opposition Popular Party, said the tax is needed partly to compensate the municipality for austerity measures imposed by the socialist government in Madrid.
La Linea residents would be exempt, but it was not clear if Gibraltarians would also have to pay.
The Gibraltar government reacted angrily and said it has contacted the Spanish authorities over the decision.
"The confused statements by the mayor of La Linea in respect of the proposed toll describe a litany of illegalities under EU Law and probably also under Spanish law," it said in a statement.
"The mayor of La Linea is clearly engaged in a political manoeuvre with his central government, which is unlikely to allow the proposal.
"The mayor's proposals are wholly unacceptable both legally and politically and in the unlikely event that these measures should be introduced, the (Gibraltar) government will take appropriate steps."
Spain ceded Gibraltar to Britain in 1713 under the Treaty of Utrecht but has retained first claim on the tiny peninsula should Britain renounce sovereignty.
"The Rock" has long fuelled tensions between Spain and Britain, with Madrid arguing the 6.5-square-kilometre territory that is home to roughly 30,000 people should be returned to Spanish sovereignty.
But its people overwhelmingly rejected an Anglo-Spanish proposal for co-sovereignty in a referendum in 2002.
In recent months British and Spanish naval and police boats have engaged in a series of cat and mouse games in the waters off Gibraltar, which lies at the strategic western entrance to the Mediterranean.