Concerns have been raised that it could become a "bargaining chip" in Brexit talks
The British Prime Minister Theresa May has vowed to get the best Brexit deal for Gibraltar.
Theresa May said the UK remained "steadfastly committed" to Gibraltar amid concerns it could become a "bargaining chip" in Brexit negotiations.
Spain has a long-standing territorial claim on Gibraltar, which has been held by the UK since 1713 and has the status of a British overseas territory.
Draft Brexit negotiating guidelines, sent out on Friday, contained a clause suggesting Spain will be able to veto any future trade deal between the EU and the UK.
Mrs May, who has been criticised for not mentioning the territory in her Brexit letter to the EU, spoke to Gibraltar's chief minister Fabian Picardo to reassure him and the people of Gibraltar over their status.
A Downing Street spokeswoman said Mrs May "reiterated our long-standing position that the UK remains steadfastly committed to our support for Gibraltar, its people and its economy".
"The Prime Minister said we will never enter into arrangements under which the people of Gibraltar would pass under the sovereignty of another state against their freely and democratically expressed wishes, nor will we ever enter into a process of sovereignty negotiations with which Gibraltar is not content.
"The Prime Minister said we remain absolutely dedicated to working with Gibraltar for the best possible outcome on Brexit and will continue to involve them fully in the process."
The reassurance from Mrs May comes as former Conservative leader Lord Howard said that she would show the same detemiation to defend Gibraltar as Margaret Thatcher did over the Falklands.
Speaking to Sky News he said "I think there's no question whatever that our Gibraltar will stand by Gibraltar.
"Thirty-five-years-ago this week, another woman prime minister sent a task force half way across the world to defend the freedom of another small group of British people against another Spanish-speaking country.
"I'm absolutely certain that our current Prime Minister will show the same resolve in standing by the people of Gibraltar."
Additional reporting from IRN.