A United Kingdom government spokesperson said: "The EU's provisions for visa-free travel into and out of the [passport-free] Schengen area cover Gibraltar, and mean that in any scenario, British nationals from Gibraltar will be able to travel for short stays in and out of Spain and other countries in the Schengen area".
A government spokesperson said: "Gibraltar is not a colony and it is completely inappropriate to describe in this way. We need to be prepared, so we are ready if the politics moves in that direction", the newspaper quoted the source as saying.
The regulation referred to Gibraltar as a "colony".
A Government spokesman said: "We want to protect jobs and the economy as well as provide certainty for businesses and individuals as we leave the EU".
Two-thirds of exporters to the European Union were looking to relocate overseas, and just under half of IoD members who are engaged with contingency planning have examined the feasibility of moving operations.
Gibraltar officials said the use of the term colony did not help to create a "climate of trust" between the territory and Spain. European Union diplomats point to the territorial issue as one of those that could fray the unity the 27 have shown in negotiations so far.
"The use of such language, were it to materialise in the final documents, does not assist the creation a climate of understanding and trust between Gibraltar and Spain as we prepare to leave the European Union".
In a speech in Rome today Visco said: "any financial markets malfunctions could have major repercussions for all the countries involved and this issue is now being looked at very closely".
A statement issued by the Council of the EU said: "Ambassadors mandated the Council Presidency to start negotiations with the European Parliament on this legislative proposal".
The EU proposed allowing visa-free travel for Britons in November.
But diplomats said Britain's ambassador to the EU Sir Tom Barrow had objected to the wording of the text; it placed the 33,000 people of Gibraltar in a different category from U.K. citizens - with the same travel rights - and it also spelled out Spain's claim to sovereignty over "The Rock" at the United Nations.