Whereas Buckingham Palace and the Foreign Office remained tight-lipped about the affair, Spain's EFE news agency said the visit was cancelled by the royal palace in Madrid.
A Spanish government statement said it was "inadequate" in the current circumstances for Queen Sofia, 73, to attend the lunch on Friday. Her participation was cancelled at the suggestion of the government, the statement made clear.
Queen Sofia's husband, King Juan Carlos, who is recovering from hip surgery, had already declined his invitation to the lunch at Windsor Castle, outside London.
The tension relates to a planned visit to Gibraltar in June by Prince Edward, and his wife, Sophie, as part of Britain's Diamond Jubilee celebrations.//DPA
Spain continues to claim sovereignty over Gibraltar, which has been ruled by Britain since 1713 under the terms of the Treaty of Utrecht.//DPA