"There aren't enough guarantees yet in the deal that is being negotiated in Brussels, therefore Spain continues to maintain a veto," Sanchez told a press conference in Havana, Cuba. "If there is no agreement, what will happen is that the European Council is unlikely to take place."

Sanchez wants to see a satisfactory, written declaration from the UK that the 2.6-square-mile territory of Gibraltar - ceded to Britain in 1713 - won't automatically be covered by any future UK-EU trade agreement.

The spat comes 18 months after Britain started negotiations with the EU over its withdrawal from the bloc. An agreement in principle was reached earlier this month and leaders have insisted there can be no issues left unresolved going into the summit. The sign-off will pave the way for May to try to get support for the deal from the British Parliament, which might prove the trickiest step yet.

After EU and Spanish officials spent Friday in Brussels trying to agree wording to sit alongside the draft Brexit treaty, Sanchez said he hadn't been offered enough.

A European Commission spokesman said earlier he expected the summit to go ahead, as did a spokesman for German Chancellor Angela Merkel.

Before Brexit negotiations started, the UK agreed with the EU that any future trade agreement won't cover Gibraltar without the express consent of Spain. The Spanish government said wording in the deal agreed this month doesn't make that clear.

Spain lays claim to Gibraltar, a rocky outcrop off its southern coast, and questions the treaty that ceded it to Britain. The issue is also playing into regional elections in Andalusia, the Spanish region that neighbours Gibraltar, and that is a traditional stronghold for Sanchez's Socialist party.

Bloomberg