FOCUS-GIBRALTAR IS NEST OF ORGANISED CRIME-SPAIN

MADRID, March 3 (Reuters) - Spain has handed over to Britain a report about
Gibraltar that describes the disputed colony as a nest of organised crime,
government sources said on Wednesday.

Prime Minister Jose Maria Aznar presented his British counterpart Tony
Blair with the report, detailing Spanish police operations against drug
smugglers and other criminal activities linked to Gibraltar, when the two
met in Germany last week.

The report says a lack of financial transparency on the rock gives
Gibraltar "a genuine infrastructure for the financial and bureaucratic
logistics of significant illegal traffic and money laundering", one source
said.

It said drug trafficking in Gibraltar, which Spain ceded to Britain in
1713, was "a stain that is impossible to eradicate".

Foreign Minister Abel Matutes reaffirmed on Tuesday that Spain would
maintain strict controls at its frontier with Gibraltar until the British
colony complies with EU regulations on financial transparency and public
accounting.

Spain has tightened border controls in recent months as part of a dispute
over the colony which Spain says is a "parasite economy" damaging to its
interests. Cars crossing the border have regularly been delayed for several
hours.

The Gibraltar government has accused Spain of spreading lies and propaganda
to further its longstanding claims to sovereignty.

Some 5,000 Spaniards who cross the border every day to work in Gibraltar
held a demonstration on Wednesday to protest at the tighter controls which
they say are damaging their livelihood.

The report handed to Britain details a series of police operations against
organised crime gangs with links to Gibraltar, the sources said, confirming
an article published on Wednesday in the daily El Mundo.

It said that in one investigation dubbed "Operation Victoria" last October,
police seized 11.5 tonnes of hashish resin, 1,234 kg (2,720 lb) of cocaine
and 12,050 designer drug pills, as well as numerous firearms.

It concluded that the gang was involved not only in drug trafficking but
also in organised crime, "without ruling out kidnapping and murder".