By Peter Griffiths
LONDON (Reuters) - Tensions over Gibraltar escalated on Monday when the British territory's chief minister accused Spain of "saber-rattling" and behaving like North Korea after Madrid floated the idea of a new border crossing fee and airspace controls.
British Prime Minister David Cameron is "seriously concerned" about the situation and has demanded an explanation from the Spanish government about the proposals, his spokesman said.
The rocky outcrop at the southern tip of the Iberian peninsula has long been a source of friction between the two countries, even though they are NATO allies and European Union partners.
The row over its sovereignty flared up last month when Gibraltar's boats dumped concrete blocks into the sea to create a reef for fish at the mouth of the Mediterranean. Spain said the reef would block its fishing boats.
Spain hit back with tougher border checks that caused long delays and tourists waiting for six hours in the blazing heat.
Reinforcing its claim to the territory, Spain's Foreign Minister Jose Manuel Garcia-Margallo signaled a tougher stance on the issue on Sunday, saying "the party is over". That was an apparent reference to years of a softer policy on Gibraltar under the previous Socialist government.
Spain is considering a new 50 euro ($66.42) fee for people crossing the border, tax investigations into Gibraltarians who have property in Spain and a ban on planes using its airspace to reach the territory's airport, he told a paper.
Gibraltar's Chief Minister Fabian Picardo said the proposals were the "politics of madness" and that "hell will freeze over" before it removes the reef from the waters off a territory ceded to Britain in 1713.
"He is saber-rattling à la North Korea. It almost makes one feel as if you are listening to the politics of Franco in the 1950s and 60s," Picardo told Sky News, referring to the fascist dictator who ruled Spain from 1936 to 1975 and wanted to regain Gibraltar.
Cameron's spokesman said the Spanish government had not raised its proposals for Gibraltar with Britain.
"We are seeking an explanation from them regarding the reports that they might target Gibraltar with further measures," the spokesman said.
The opposition Labour Party accused Spain of trying to score political points over Gibraltar, which has a population of 30,000 and relies on tourism, the gambling industry and offshore banking.
"They appear to be using the prospect of a transit fee as a bargaining chip with the UK. This is simply unacceptable," Labour foreign affairs spokesman Kerry McCarthy said.
William Dartmouth, a member of the European Parliament for the anti-EU UK Independence Party, accused Spanish Prime Minister Mariano Rajoy of engineering a row to distract from a corruption scandal in his party and Spain's bleak economy.
"Their futile claims over Gibraltar seem to fit his bill," Dartmouth said in a statement that urged Cameron to send a frigate to the territory.
Britain's Foreign Office said it "will not compromise on sovereignty".
"Our differences with Spain on Gibraltar will be resolved by political means through our relationship as EU partners not through disproportionate measures," it said.
(Editing by Andrew Osborn, Guy Faulconbridge and David Evans)