The jurisdiction's new pension regulations followed "discussions with the United Kingdom authorities" in which it was decided not to introduce flexible access for Gibraltar Qrops in a move which could be seen as giving the British overseas territory a competitive edge in the worldwide pensions market.
Events were held during the weekend to mark the 35th anniversary of the Falklands War, when Britain under then-Prime Minister Margaret Thatcher fought off an Argentine invasion of the disputed archipelago in the South Atlantic.
Shadow foreign secretary Emily Thornberry said: "Having threatened to end security co-operation with the rest of the European Union and failed to mention Gibraltar in her letter to Donald Tusk, the Prime Minister is now refusing to condemn the absurd and risky comments made by Lord Howard".
Dastis did stress that Madrid would not welcome the disintegration of the United Kingdom and said that Scotland would have to apply for European Union membership, a process fraught with uncertainty that is likely to take several years.
The EU's guidelines followed a letter from Mrs May formally triggering Brexit talks, which did not mention Gibraltar directly.
Labour's shadow foreign secretary Emily Thornberry said Lord Howard's comments were "inflammatory" and would "not help Britain get what it needs from these hard Brexit negotiations".
"Thirty-five years ago this week, another woman prime minister sent a task force halfway across the world to defend the freedom of another small group of British people against another Spanish-speaking country, and I'm absolutely certain that our current prime minister will show the same resolve in standing by the people of Gibraltar", Howard told Sophy Ridge on Sunday on Sky News.
Speaking to reporters on a flight to Jordan, Mrs May was asked if Britain's approach to Gibraltar should be described as "jaw jaw, not war war".
A columnist from the Sun deployed a famous Winston Churchill line, writing, "We are only just into these Brexit negotiations and to be honest I have already gone from jaw-jaw to war-war". Spain has long sought to reclaim Gibraltar.
Meanwhile, Bloomberg reported that Spanish Foreign Minister Alfonso Dastis said of Lord Howard: "It looks like someone in the United Kingdom is losing their composure".
May said she hoped the trip would "herald a further intensification in relations between our countries".
A Spanish navy patrol ship entered Gibraltar's territorial waters without permission on Tuesday, the government of the British outpost on the southern tip of Spain said.
Spain urged the British government to keep a cool head in the negotiations over the future of Gibraltar.
Mr Picardo told the BBC it was "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. In that referendum, about 99 percent voted to remain with the U.K. Only 187 of people voted in favor of joining up with Spain, according to the Guardian.
Gibraltar was reluctantly ceded to Britain in the 1713 Treaty of Utrecht, and the people who live there have twice voted overwhelmingly to remain a British dependency.
In an interview with Julia Hartley-Brewer, Baroness Butler-Sloss said a discussion on Gibraltar was unavoidable, but it didn't need to be made an "upfront" issue.
Gibraltar's leader scolded EU Council President Donald Tusk on Monday for giving Spain a right of veto over the future relationship between the British enclave and the EU.
In her six-page letter to the European Union triggering Article 50, the Prime Minister didn't even mention Gibraltar, and the Government seemed to have been caught off guard by the weekend's events.
Picardo said the European Union should remove the reference to Gibraltar from the draft guidelines.
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