The Government has accused Spain of "a clear violation of UK sovereignty" by sending boats and helicopters into British waters in Gibraltar.
Ministers said repeated incursions are "completely unacceptable and unlawful under the international law" and pledged to urgently raise the matter with the Spanish.
The international row broke out after Spanish state vessels chasing suspected drug smugglers made several forays into waters around Gibraltar in the past two days.
The move has reignited tensions between Gibraltar and its Spanish neighbours.
The Royal Navy was used to escort the Servicio de Vigilancia Aduanera (SVA) - the Spanish police's drugs and money laundering squad - out of the waters following the row.
Foreign Office Minister Hugo Swire said: "We understand that the Spanish were in pursuit of vessels who may have been committing crimes.
"However it is completely unacceptable and unlawful under the international law of the sea to enter our waters without notifying us.
"These repeated incursions into British Gibraltar territorial waters are a clear violation of UK sovereignty by another EU country and we will be raising this as a matter of urgency with the Spanish authorities."
In one incident the Spanish are understood to have been pursuing smugglers who were dumping suspected bales of drugs off the side of a fast-speed inflatable boat when they travelled through British waters.
They also allegedly flew a helicopter over the Sandy Bay beach area of the island in a move branded "extremely dangerous" by the Gibraltan Government.
In another incident the Spanish allegedly boarded a boat and questioned crew.
The Gibraltan authorities said they should have been asked to assist in catching the criminals once the chase looked like it would go into British-controlled waters.
They blamed failure to do so for the escape of one suspected drug smuggler.
The Chief Minister of Gibraltar, Fabian Picardo, said the incursions amounted to an illegal and dangerous display of "bravado".
He said: "I am sure I am speaking for the whole of Gibraltar when I say that we consider this has been a serious and unnecessary failure on the part of the Spanish SVA which has had outrageous consequences in respect of the violation of our sovereignty."
He said the failure to cooperate resulted in the escape of a criminal who should have faced justice for drug trafficking.
He added: "We all want to stop the drug smugglers. It beggars belief that the SVA have acted in this way that, in effect, has allowed a criminal who should be behind bars to get away.
"The whole of Gibraltar will be outraged at their failure to cooperate in a way that would have better assisted to capture the criminals in question."