Iberia is to stop flying to Gibraltar because of weak demand, the airline said, two-and-a-half years after it began the first air service between Spain and the British colony it claims.

The twice-weekly service between Madrid and Gibraltar was the first scheduled route by a Spanish airline to the territory claimed by Spain, and its start in December 2006 marked a new high in Anglo-Spanish relations over the Rock.

"It was simply a lack of demand, nothing else," a spokesperson for the airline said. Apart from its claims to Gibraltar, Spain says the airport, which doubles up as a Royal Air Force base, is on land not ceded to Britain under the Treaty of Utrecht in 1713.

Iberia's last Airbus flight will take off from Gibraltar's airport, which juts out into Algeciras Bay, for the last time on Sunday.