Miguel Angel Moratinos, Spain's foreign minister, has visited Gibraltar, the disputed British colony, becoming the first member of the Spanish government to make the trip in 300 years.

Moratinos who met David Miliband, his UK counterpart, and Peter Caruana, Gibraltar's chief minister, said that while Spain did not renounce its territorial claim to the rocky outcrop, the way forward was through co-operation.

Spain ceded Gibraltar, which has a population of 30,000 people, to Britain in 1713, but has since called for the territory to be returned.

The conservative Popular Party, Spain's main opposition, has criticised Moratino's decision to visit the territory, describing it as a "terrible mistake".

The party said Moratino's visit effectively treats the territory as a sovereign nation.

Leire Pajin, a spokeswoman for Spain's ruling Socialist Party, said the "issue of sovereignty is not at stake", adding the visit was to help improve the life of Spaniards living in Gibraltar.

The foreign ministers agreed to expand communications links between Spain and the
colony, including a new ferry route between Gibraltar and Algeciras and a hot
line between the two cities to discuss bilateral issues directly.

Around 12,000 people cross over from Spain daily to work in the territory, and many others visit for tourism.

Gibraltar is a haven for shipping and offshore banking because of favourable tax laws.

In 2002, its inhabitants overwhelmingly rejected an Anglo-Spanish proposal for co-sovereignty in a referendum.