The election on Thursday took place a year after Caruana called a surprise referendum which overwhelmingly rejected negotiations between London and Madrid to share sovereignty over the enclave.

Caruana, 47, called the referendum while London and Madrid were deep in negotiations on a plan to share sovereignty. The 99 percent vote rejecting proposals, combined with preoccupation over the impending Iraq war, effectively scuppered the talks.

The move worked in Caruana's favour in a colony where nearly everyone is either loyal to Britain or in favour of greater self rule. Few would countenance Spanish sovereignty.

Thorn in the side

Caruana is head of the centre-right Gibraltar Social Democrats in the colony on the southern tip of Spain, known to its 19,500 voters as "the Rock", after the towering outcrop that dominates it.

His chief rival was Joe Bossano, 64, of the centre-left Gibraltar Socialist Labour Party, whom Caruana replaced in 1996.

Neither candidate would be likely to sanction any major compromise to Madrid that would remove what remains something of a thorn in the side of otherwise warm British-Spanish relations.

Spain ceded the barren outcrop to Britain in the 1713 Treaty of Utrecht, with the proviso that Gibraltar would revert to Spain if Britain ever gave it up.

Spain has been trying to reclaim the colony ever since but Britain has resisted, partly because of the enclave's strategic importance at the mouth of the Mediterranean.