The Governor and Chief Minister have described Thursday morning's incident at Eastern Beach as a grave breach of British sovereignty and jurisdiction.
The incident saw a confrontation between Spanish Customs and a group of smugglers.
Number Six says it's coordinating its response to the incident with senior officials at the United Kingdom’s Foreign, Commonwealth and Development Office in London and with the British Ambassador to Spain.
The joint statement with the Governor says the lawlessness of a gang of individuals apparently engaged in illicit activity in Gibraltar is unacceptable, and represents activity that will not be tolerated.
It adds UK officials will be contacting Spanish officials to seek an explanation of this violation of the sovereignty of Gibraltar, before making a final determination of what action to take.