The government of Gibraltar said on Wednesday evening that King Felipe's comments to the British parliament about an "acceptable" bilateral arrangement—between London and Madrid—on the future of the Rock were "undemocratic" and that the suggestion "completely ignores the existence of the people of Gibraltar".
"There are therefore not two relevant Governments, but three", said the statement.
"The plain fact is that Spain lost Gibraltar over three hundred years ago and that Gibraltar has been British ever since. Spain ceded Gibraltar in perpetuity in 1713. In two referenda held in 1967 and 2002 the people of Gibraltar voted to remain British."
Spain has been trying to turn the status of the Rock into a bilateral matter, effectively ignoring Gibraltar, for several years.
King Felipe's remarks were well received in Madrid and made the print front pages of Spain's leading daily newspapers on Thursday morning.
In its editorial, El Mundo said Brexit was "clearly an opportunity to put an end to the anachronistic situation" of Gibraltar, and that the British government "cannot keep brandishing that changes in the status of the Rock depend on the will of its inhabitants", which are an affront "to Spanish territorial sovereignty".
ABC labelled the speech "historic", "an impeccable exercise in diplomatic balance and sincerity".
El País placed more emphasis of the "European unity" aspects of His Majesty's remarks.
Gibraltar Chief Minister Fabian Picardo said: "The people of Gibraltar want normal, friendly relations with Spain on the same basis as with any other country. However, we have no desire to form part of Spain or to come under Spanish sovereignty in any shape or form".
"Our freely expressed democratic wishes must be respected and that means understanding Gibraltar will remain 100% British."