The BBC's transport correspondent Christopher Wain: "It has annoyed British ministers"

All ministers on the European Union Transport Council had been expected to agree to proposals which would force airlines to pay passengers of both scheduled and chartered flights who get 'bumped'.

Overbooking is a common practice which ensures planes fly full, even if all passengers do not turn up.

Indeed, problems occur when all passengers do show up - and some have to be sent away.

An 18th Century peace treaty does not cover the site of Gibraltar Airport

In the past only passengers on scheduled flights were entitled to refunds.

The new scheme wants to extend compensation rights to passengers on chartered flights.

It also requires airlines to inform passengers of their legal rights.

But Spain wants Gibraltar to be made exempt from the plans.

Although Britain has governed the rock for 300 years, an 18th Century peace treaty does not cover the site of the island's airport.

Spain says that the Denied Boarding Compensation Scheme should not be implemented there until the wrangle over ownership of the site has been resolved.

British ministers are annoyed, and it is now likely that the reform will be postponed.