A SIMMERING row over an expedition to recover treasure worth millions of pounds from the wreck of a 17th-century British galleon erupted into a full-scale diplomatic confrontation yesterday.

HMS Sussex sank in a storm in 1694 off Gibraltar, carrying ten tons of gold and a hundred silver ingots, valued today at up to £279 million.

But the Spanish Government yesterday demanded that an American company trying to recover the bullion must halt operations immediately.

The 80-gun Sussex, which led a fleet of 12 ships, was carrying the treasure to persuade the Duke of Savoy to side with England, Spain, the Netherlands, Sweden and the Holy Roman Empire against the French in what was known as the War of the League of Augsburg.

It was a day out of Gibraltar when it foundered. Only two of the 500 crew survived and the body of its commander, Admiral Francis Wheeler, still in his nightshirt, was washed ashore several days later.

Under international law, the remains of sunken ships belong to the nation under which they sailed. But after offshore surveys, Odyssey Marine Explorations, based in Florida, claimed to have identified the wreck in 1998. In 2002, the British Government gave it permission to search for the treasure for its “archaeological value”.

The regional government of Andalusia has also staked its claim to part of the treasure, arguing that the remains include archaeological riches belonging to the region. It set strict conditions for the search.

In a letter to Eduardo Aguirre, the US Ambassador in Madrid, the Spanish Foreign Ministry said that the company had breached those conditions.

If Odyssey finds the missing gold and silver, it would mean a huge payout for the company and Britain. Some archaeologists say it could be the greatest underwater fortune found.

Odyssey would get half of anything it found between £25million and £279 million, less if the value was greater. Ecologists In Action, a Spanish group, called Odyssey “treasure hunters” with no interest in archaeological artefacts.

Odyssey says that it respects international law and that the project is based on communications between the relevant governments and transmitted to the company. The US Embassy declined to comment. The Ministry of Defence in London said the matter was “between the United States and Spain”.

Times Recommends

• Thousands of Tamils dying in 'welfare camp'
• Jackson 'rebuilt his nose before he died'
• Renewed Iran protests crushed by militia