Gibraltar was the first counting area to declare following yesterday's vote and overwhelmingly supported EU membership.
AFP reports that Spanish foreign minister Jose Manuel Garcia-Margallo said on Spanish radio that the government would allow Gibraltar to retain single market access.
“Our formula... is British-Spanish co-sovereignty for a determined period of time, which after that time has elapsed, will head towards the restitution of Gibraltar to Spanish sovereignty,” he said.
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"It is now a bilateral issue that will be negotiated exclusively between the United Kingdom and Spain."
Gibraltar chief minister Fabian Picardo has used social media to appeal for calm.
We have surpassed greater challenges. It is time for unity, for calm & for rational thinking. Together & united we will continue to prosper.— Fabian Picardo (@FabianPicardo) June 24, 2016
On Twitter, Picardo wrote: "We have surpassed greater challenges. It is time for unity, for calm & for rational thinking. Together & united we will continue to prosper," he said.