MADRID (AFP) - Spain on Friday (June 24) proposed sharing sovereignty over Gibraltar after Britain voted to leave the European Union, saying it would allow the overseas territory to maintain access to the EU's single market.

"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," Spanish Foreign Minister Jose Manuel Garcia-Margallo told Spanish radio.

The tiny rocky outcrop nestled on Spain's southern tip has long been a source of friction between London and Madrid, which wants it back under its control centuries after it was ceded to Britain in 1713.

Spain's conservative government, which has been in place since 2011, has been particularly vocal about its desire to see Gibraltar come back into its fold, and the Rock is worried that Brexit will leave it at the mercy of Madrid.

Mr Margallo said the issue of Gibraltar was no longer within the remit of the European Union.

"It is now a bilateral issue that will be negotiated exclusively between the United Kingdom and Spain," he added, saying a solution would have to be found if Gibraltar wanted to keep its access to the EU's single market.

The Rock, as it is known, relies in large part on access to the single market for its thriving economy.

In a tweet, Gibraltar's Chief Minister Fabian Picardo called for calm.

"We have surpassed greater challenges. It is time for unity, for calm & for rational thinking. Together & united we will continue to prosper," he said.