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The Government has rejected GSD claims that its new residency policy is "anti-British", saying the rules apply regardless of nationality.
It says the Foreign Office and the Convent were consulted before the policy was introduced and raised no concerns about the treatment of British citizens.
The Government says it acknowledges business organisations have raised concerns about how the new system operates and says it will continue reviewing the framework as experience develops.
However, it argues these concerns should not be presented as evidence of discrimination against British nationals.
The Government stresses that the right to work and the right to establish residency are separate matters.
It says residency criteria apply regardless of nationality, with discretion available where applicants have skills considered important to Gibraltar's economy or where particular sectors face labour or skills shortages.
Chief Minister Fabian Picardo says the policy is intended to protect Gibraltar's limited housing, healthcare, education and infrastructure.
He argues Gibraltar can remain British, open to business and at the same time impose controls over who establishes residence.
Mr Picardo also accused the GSD of attempting to create mistrust between Gibraltar and the UK for political purposes.
He says the GSD's vow to change the policy provides voters with a clear political choice over how Gibraltar's public services and infrastructure should be protected.