The agreement sees the UK retaining international responsibility for Gibraltar, including its external relations and defence, and as the Member State responsible for Gibraltar in the European Union.

"Thus the close constitutional links with the UK, and enduring British Sovereignty are, in accordance with the wishes of the people of Gibraltar, enshrined in the new Constitution," explained a joint statement published by the Gibraltar government last week.

Howwever, the new Constitution also confirms that the people of Gibraltar have the right of self-determination - the first time that this right has been enshrined in Gibraltar’s Constitution.

According to the statement, the new Constitutional text introduces "substantial constitutional reform and modernisation," and the main elements of the text include the following:

• Human Rights provisions are fully aligned with the European Convention on Human Rights.
• Whereas under the current Constitution the rights of Gibraltar Ministers are defined and the Governor enjoys the remainder, under this new Constitution that position is reversed. Accordingly, the powers of the Governor are defined and the elected Gibraltar Government will enjoy the remainder.
• The Gibraltar House of Assembly is restyled the Gibraltar Parliament and that Parliament may now determine its own size.
• The right of UK Ministers to disallow laws passed by the Gibraltar Legislature is removed from the Constitution.
• The Governor’s powers to withhold assent from laws passed by the Gibraltar Legislature are restricted to certain defined circumstances.
• The Governor’s special legislative powers which at present extend to all matters, are restricted to only matters which are his responsibility.
• The offices of Deputy Governor and Financial and Development Secretary are abolished as Constitutional Offices. The Financial Secretary and the Attorney General cease to be members of the House of Assembly.
• The Governor’s power to dissolve Parliament and remove the Chief Minister are restricted to reflect grounds more typical of those applicable in the UK.
• Whereas currently all executive authority under the Constitution vests in the Governor, under the new Constitution it will vest, as in the UK directly in Her Majesty the Queen, and (except in the areas of the Governor’s responsibilities) it will be exercisable on Her behalf by the elected Gibraltar Government.
• The Gibraltar Council is formally abolished. Ministers will be appointed and charged with responsibilities by the Governor acting in accordance with the advice of the Chief Minister, thus reflecting the position in the UK.
• As in the UK, the Gibraltar Government is defined as Gibraltar Ministers together with Her Majesty, who is represented in Gibraltar by the Governor.
• The bulk of responsibilities for policing in Gibraltar are transferred to a statutory Gibraltar Police Authority.
• A new Judicial Service Commission is constituted to advise on the appointment and other matters relating to members of the judiciary. This Commission would be chaired by the President of the Court of Appeal, and would also comprise the Chief Justice, the Stipendiary Magistrate and two members appointed by each of the Governor and the Chief Minister.
• Crown Lands must be disposed of by the Governor in accordance with the advice of the Chief Minister. Crown Lands in the occupation of the MOD must be disposed of with the consent of the Secretary of State and the Chief Minister.

Commenting on the agreement Mr Straw noted that: "The new constitution strengthens Gibraltar’s links with the United Kingdom, and thoroughly modernises the relationship between us, which I hope will be as welcome to the people of Gibraltar as it will be in the UK."

Meanwhile, Mr Caruana observed that the agreement is a "good outcome" which maximises Gibraltar's self government while preserving British Sovereignty and Constitutional links with Britain.

"Everyone in the Gibraltar Delegation regards this as a good constitutional text. It provides for a modern relationship between the UK and Gibraltar. The Government of Gibraltar is delighted with this settlement, and will have no hesitation in recommending it to the people of Gibraltar," he added.