THERESA May has laughed off a suggestion from one of her Conservative predecessors by making clear Britain will not be sending a Falklands-style taskforce to defend Gibraltar, insisting it is “definitely jaw-jaw” with Spain.

Lord Howard, who preceded David Cameron as Tory leader, responded to a draft EU document, which suggested Madrid would have a veto on the post-Brexit agreement on the Rock, by saying he was sure the Prime Minister would show the same resolve over Gibraltar as Margaret Thatcher had over the Falklands.

Despite the fact the Tory peer insisted he was not suggesting Britain might go to war with Spain over the overseas territory, opposition politicians accused him of “absurd sabre-rattling”.

In light of his comments, Madrid urged the UK Government to calm down. Alfonso Dastis, the Spanish Foreign Minister, said: "The Spanish Government is a little surprised by the tone of comments regarding Gibraltar coming out of Britain, which is a country known for its composure."

During a diplomatic visit to Jordan, Mrs May evoked Sir Winston Churchill’s famous dictum, that it was always "better to jaw-jaw than war-war".

The PM said: “What we are doing with all European countries in the European Union is sitting down and talking to them. We are going to be talking to them about getting the best possible deal for the United Kingdom and for those countries, Spain included. It's definitely jaw-jaw."

As the Gibraltar row erupted over the weekend, it emerged that David Davis was in Spain for Brexit talks with his counterparts. No 10 confirmed that the Brexit Secretary would not be giving interviews but stressed how his visit was a pure coincidence; it had been planned for weeks.

Downing Street characterised the discussions between Mr Davis and Mr Dastis as "very friendly and very constructive", adding the Secretary of State had echoed Mrs May's position that Britain would be "steadfast in our support for Gibraltar".

Questioned about the prospect of a Falklands-style taskforce heading to Spain, the PM’s spokesman declared: “It isn't going to happen," adding: "All that Lord Howard was trying to establish is the resolve that we will have to protect the rights of Gibraltar and its sovereignty."

Mrs May added: "Our position on Gibraltar has not changed. We will be working with them and as part of our negotiations to ensure that we get the best possible trade deal for the United Kingdom and the best possible deal for Gibraltar."

She reiterated her message of support in a phone call to Fabian Picardo, Gibraltar's Chief Minister, who insisted the Rock’s 30,000 citizens would not be treated as "bargaining chips" in the Brexit negotiations.

He said it had been "very helpful of Spain to have put this front and centre this early on in the process", rather than waiting until the final moment to throw a spanner in the works, as some had expected.

"Spain has made a huge error of judgement not just in putting this early on but in effect denying their own citizens the application of that deal if they work in Gibraltar going forward," added Mr Picardo.

Meantime at Westminster, Tim Farron, the Liberal Democrat leader, said it was with “some relief” that he had heard the PM had ruled out sending a gunboat to Gibraltar.

"It is extraordinary that just days after the Government triggered Article 50, a former leader of the Conservative Party has already raised the prospect of war with one of our nearest European neighbours.

"And then, far from seeking to reduce the tension, Number 10 decides to ramp up the rhetoric by boasting of its resolve. Mrs May seems determined to lose friends and alienate people," he added.

Earlier, Jack Straw, the former Labour Foreign Secretary, whose 2002 referendum asking Gibraltarians if they wanted Britain to share sovereignty with Spain was rejected by 99 per cent to one, dismissed Lord Howard’s suggestion of military action as "frankly absurd and reeks of 19th century jingoism".