Spain has agreed to reduce new measures imposed at the Gibraltar border after David Cameron personally intervened in the dispute, Downing Street has claimed.
The prime minister called his Spanish counterpart, Mariano Rajoy, today and warned there was a "real risk" of damage to Britain's relations with Spain if the country did not cease its escalation of the row over Gibraltar.
"[Cameron] reiterated that the issue should not damage our bilateral relations," a Downing Street spokesperson said.
"However there was a real risk of this happening unless the situation at the border improved.
"Mr Rajoy agreed that he did not want the issue to become an obstacle in the bilateral relations and that we needed to find a way to de-escalate the issue.
"Prime minister Rajoy committed to reducing measures at the border. Both leaders agreed that there should be a solution to the fishing dispute."
Briefings in Spain told a different story and suggested the Spanish prime minister was not backing down on the border checks.
The call follows a formal protest by the British ambassador to Spain over the Madrid government's "disproportionate" checks at the border.
Giles Paxman visited the Spanish secretary of state (for foreign affairs) Gonzalo de Benito to formally protest at the disproportionate border checks at the weekend," a Foreign Office spokesperson said.
"The ambassador re-iterated that the UK would stand shoulder to shoulder with Gibraltar in face of threats from Spain."
Heightened tensions over the rock began over Gibraltar's plans to create an artificial reef to boost the local fishing industry.
Gibraltar's chief minister has accused Madrid of sabre rattling and conducting itself like North Korea. Others have said it is the most aggressive response from Spain over the issue since the Franco dictatorship.
The British claim on the territory began 300 years ago when it was signed over permanently by the treaty of Utrecht.
Peter Hain came close to solving the dispute in 2002, but there has been little movement since then.
Spanish ministers have suggested that a £43 levy may be imposed on vehicles crossing the border and raised the prospect of closing airspace.
The government says it would then use the proceeds to compensate Spanish fisherman, whose grounds would allegedly be damaged by the artificial reef.
The British government says there will be no compromise over the sovereignty of the territory.