The EU will not back down in its support for Spain’s demands when it comes to Gibraltar in Brexit negotiations, senior European diplomats have said. The European council has said the British overseas territory could be included in a trade deal between London and Brussels only with Madrid’s agreement.

Senior EU diplomats, talking to the Guardian, have dismissed the suggestion that the EU will go soft on the issue of Gibraltar in the coming weeks and have said Spain has spent time and effort in cultivating support among the other 26 member statesfor its position.

We asked Gibraltarians and those who live in the overseas British territory how they feel about their future. Here is what they said.

Chris Peach, 35

I wanted to vote leave like many other people here, but like many I voted remain because we looked to the EU for support against Spanish oppression and bullying.

The EU is important to our economy and our way of life. The closure of the frontier with Spain in 1969 choked the people of Gibraltar, but we endured until the border was reopened as a condition of Spain joining the EU and we have prospered since. Therein lies the single biggest reason most Gibraltarians voted to remain. With recent developments and the EU taking sides with Spain, a lot of people here are starting to think differently. I voted selfishly and I regretted it instantly but was relieved to see the vote had gone in favour of the leave camp.

I have two small children, the cost of living may well go up as well as the cost of importing commodities. If the frontier were to close as a result it would cut me off from friends and family who live on the Spanish side.

I would like to see Gibraltar recognised as a devolved government in much the same way as Scotland, Wales and Northern Ireland are, and have our own representatives in parliament. I would like to see Britain accept that Gibraltar wants to be British and that we are worthy of the name. There is a lot we have to offer Britain and her allies, least of all the strategic naval base at the mouth of the Mediterranean.

David, 62, retired

I think the UK government’s reaction is a complete red herring. Spain is not threatening to invade Gibraltar and sovereignty is not being questioned at this stage. Britain’s reaffirmation of support for continued British sovereignty, though welcome, misses the point, perhaps deliberately.

Theresa May has been criticised for making the mistake of not mentioning Gibraltar in her [article 50] letter to [European council president Donald] Tusk. I don’t think it was a mistake, I think it was a conscious decision not to turn Gibraltar into a red line issue, because at the end of the day Gibraltar was not important enough for the UK.

As a Gibraltar resident I rely on an open and free-flowing frontier with Spain. Most of the goods and services which arrive in Gibraltar come via the land frontier even if they do not originate in Spain. The goods sold at the local Morissons are brought to Gibraltar by overland container from the UK via Spain. Many Gibraltar-based financial [firms] and other businesses sell their services to the rest of the EU. If Gibraltar is excluded from any post-Brexit agreement then at least some of these businesses will relocate to Malta, Cyprus, Ireland. This will hit revenues of the local government and may affect my pension.

May should have stood up for us when she wrote that letter.

Adriana Lopez, 22, student

Britain seems like a union that has never been so divided. The voices and concerns of the other devolved administrations that make the United Kingdom are blatantly being ignored. Which is why I personally started referring to Brexit simply as Exit: English exit.

Gibraltar’s good relationship with the EU has strongly influenced the European identity that is felt in Gibraltar and resulted in 96% wanting to remain part of the EU.

The people of Gibraltar will want to remain British as long as our ideals and values match. I would like to see a Gibraltar that is not used as a bargaining chip. I am certain, that if this was the case, the attitudes towards feeling British would change in Gibraltar. In my opinion, the best solution for Gibraltar would be to gain more independence.

Granting Spain a veto comes as no surprise to Gibraltarians. I have every faith that the people of Gibraltar will come together to ensure our voices are heard and that no bully tactics will tear apart its people or its sovereignty.

David Smith, 53, IT project manager

It is an unmitigated disaster. It is stunning how all the failures of UK government policy – healthcare, housing, wage policy and, above all, skills – have been transferred on to an external scapegoat.

Gibraltar has transformed itself into a modern, service-based economy. Our financial sector sells insurance and other products EU-wide and our gaming industry likewise. But these, and other sectors, are reliant on personnel who live in Spain. It is well known that 12,000 live in Spain and cross each day to work in Gibraltar: which is too small, and too expensive, to house them. Without fluidity at the border, the businesses that employ them will fail.

Longer term, I see no option other than a bid for independence, regardless of the legal minefield in which that will entrench us. The UK is in no position to support us as it will succumb to Spanish demands: we will be the sacrificial lamb on the altar of the benefit of the many in the UK. We are effectively now placed in co-sovereignty with a hostile power. That is not sustainable and it is time to break the ties with a powerless and distracted UK.

Melissa, 24, marketing

We are sick of Spain’s tired bullying tactics, we are sick of having to constantly defend our right to self-determination and we are sick of being described as a disputed territory. As far as we are concerned there is no dispute here, we are British, we have been British since 1713 and will remain British.

I’m really disturbed by Europe’s sudden turn against us, in favour of Spain. The people of Gibraltar voted by a majority of 96% to remain in the EU, a result stronger and more decisive than any other throughout the referendum process. The idea that we will receive the brunt of the hit from Brexit, and could be worse off than any other part of Britain, is a slap in the face. Most of the time Gibraltar feels very forgotten, especially when we constantly read statements saying ‘Northern Ireland, Britain’s only land border with Europe’ in the news.

I’d also like to see Gibraltar lose the status of a ‘British overseas territory’ and elevated to the status of member country. We should have our own Gibraltarian MPs sitting in Westminster. And I’d like to see us working closely with Madrid to help grow tourism so that it might benefit us all!

James Netto, 28, human rights lawyer

The Gibraltarian side of the debate has to be viewed through our local, truly unique mindset; three centuries of international dispute has left the majority of locals very politically engaged, yet at the same time the overwhelmingly uniting issue is that of British sovereignty over the “Rock”. In 2002, Gibraltarians delivered a vote of 99% against the idea of joint sovereignty with Spain; nationalism, pride and Britishness are not polarising concepts or dirty words for us. Our vote in favour of EU membership flows from this.

My generation was the first to grow up in a truly modern Gibraltar. Thankfully, the years of painful divide and border closures were confined to history. Our parents and grandparents spoke openly and emotionally of families being separated across the frontier when it was shut by General Franco in 1969.

In many ways, we are true Europeans. Our Saturday tapas are followed by a full Sunday roast. We regularly cross an international border that was once firmly shut. We prove that British national pride and a love for the EU can overlap. We have gained more than most Britons from our EU relationship, yet now face a situation whereby those who were the most fervently pro-European stand to lose the most from Brexit.