A Spanish corvette threatened to open fire on an American diving ship in the Gibraltar Strait yesterday over a row about sunken treasure.

The American-flagged Odyssey Explorer is searching for the 17th century wreck of the British 80-gun warship HMS Sussex which may contain gold and silver coins worth up to a staggering £250 million.

But a legal wrangle could now ensue as another wreck, a Spanish galleon, Nuestra Senora de las Mercedes sunk in 1804 by the British fleet, is also at the centre of the hunt.