British and Spanish Foreign Ministers met yesterday in Barcelona to reopen negotiations on the future of Gibraltar under the so-called 'Brussels' process, which cam to an acrimonious halt in 1997 after Spain's Foreign Minister of the time, Abel Matutes, tabled demands for the return of sovereignty over the Rock.

On Tuesday Jack Straw and Josep Pique set themselves the goal of reaching accords on co-operation and sovereignty by next summer, timing a possible outcome to coincide with the end of Spain's presidency of the European Council in June. The next formal meeting is set for early next year when the ministers will discuss ideas presented by diplomats from both countries. Once an agreed set of proposals has been assembled, it will be made the subject of a referendum in Gibraltar.

The talks are aimed at allowing more self-government for Gibraltar and at undoing some of the constraints on its 30,000 inhabitants. Britain and Spain are hoping that the improvements will be enough to win support for a referendum that will allow the two countries to share sovereignty of Gibraltar. As expected Spain has offered some 'goodies' in an attempt to soften up Gibraltarians, who are rigidly opposed to any Spanish involvement in sovereignty over the British colony, promising to increase the number of telephones available to Gibraltar from 35,000 to 100,000 and proposing to improve access to health care.

Peter Caruana, Gibraltar's chief minister, boycotted yesterday's meeting, because he had been invited only as a member of the British team rather than as a full negotiating party. Spain says that Gibraltar's government does not have the right to veto decisions made by negotiations between two sovereign states. Peter Hain, minister for Europe, agreed. "You can't come in carrying a veto on your shoulder. We can't do it, Spain can't do it and Gibraltar can't do it."

As the Gibraltar talks got under way in Barcelona Tuesday morning, about seventy Gibraltarians demonstrated outside the building, waving placards and chanting loudly. Several members of the UK delegation walked out of the building and asked three of the protesters to enter the building. The three members of the Voice of Gibraltar were ushered into a room where they met foreign secretary Straw, Europe minister Peter Hain and other Foreign Office officials. Hain was told that it was a shame that he should have compared Gibraltarians with UK expats living on the Costa del Sol. When Hain tried to deny this, there was a lively exchange of views. While all this was happening, Spanish foreign office officials kept coming into the room looking at their watches, as Minister Piqué was being kept waiting.

After the meeting, a Joint Press Communique was issued:

Josep Piqué I Camps, the Spanish Minister of Foreign Affairs and Jack Straw, the Foreign Secretary of the United Kingdom

At our meeting today we confirmed our shared objective to continue our discussions about Gibraltar, in an atmosphere of trust and mutual co-operation, a commitment which Prime Minister Blair and Prime Minister Aznar endorsed when they met in London on 9 November. We are delighted that we are making good progress.

We discussed the full range of issues set out in the November 1984 Brussels Communiqué. We did not want to draw conclusions today. Our aim is to conclude a comprehensive agreement by the summer of next year. This overall agreement will cover all outstanding issues, including those of co-operation and sovereignty.

Our shared objective is a future where Gibraltar enjoys greater self-government and the opportunity to reap the full benefits of normal co-existence with the wider region. The guiding principle is to build a secure, stable and prosperous future for Gibraltar and a modern sustainable status, consistent with our common membership of NATO and the EU. We also agreed on the need for rapid progress on key areas of co-operation. We asked officials to work up ideas and report to the next Ministerial meeting.

While the British Government welcomed the Spanish decision to more than triple the number of telephone numbers for Gibraltar to 100,000, both Ministers agreed on the need for experts to continue discussions to resolve the other telecommunications issues. The British Government welcomed Spain's proposals to improve health care facilities in Spain for Gibraltarians, and both Ministers agreed that this should be followed up quickly. The Ministers also agreed that bilateral discussions would continue to address the pensions issue.

We agreed that the Government of Gibraltar had a very important contribution to make our discussions. Gibraltar's voice should be heard. We reiterated the invitation which we issued to the Chief Minister of Gibraltar when we met in London on 26 July to attend future Brussels Process Ministerial meetings. His role will be fully represented and he will have the opportunity to contribute fully to the discussions. The Process would benefit greatly from the direct views of the Government of Gibraltar, and through the Government of the House of Assembly and public opinion in Gibraltar as a whole.

Following the meeting, the Gibraltar government said: "There is absolutely no prospect of the people of Gibraltar accepting any proposal that involves any transfer of sovereignty, joint sovereignty, shared responsibility for Gibraltar's EU or NATO affairs, the establishment of cross border bodies or committees that give Spain a role or say in on our affairs, or any Spanish military presence in Gibraltar." However the government says it "much looks forward to its participation at future talks being made possible on fully democratic and politically reasonable terms that reflect the rights, wishes and interests of the people of Gibraltar in their homeland."