The Basque premier presented an autonomy plan to the region's parliament today which he says will end separatist violence but which Spain's government brands illegal.
Mr Juan Jose Ibarretxe's proposal for a "free associated state" would give the Basque Country the right to determine its own sovereignty by referendum and have its own international representation.
Mr Ibarretxe has billed his blueprint as a bid to end a campaign of shootings and bombings by outlawed separatist group ETA which has killed more than 840 people since 1968.
"We are presenting a firm proposal, based on respect for the will of the Basque people, which will contribute to slamming the doors on violence and expelling ETA from our lives forever," Mr Ibarretxe told the Basque assembly.
Spain's centre-right government has dismissed the plan as illegal and a concession to ETA. It also fears the scheme will shatter the 1978 constitution binding Spain's provinces.
ETA and radical Basques, including former representatives of the now banned Batasuna party, have said the so-called "Plan Ibarretxe" falls short of demands for a seven province state carved out of northern Spain and southwest France.
The proposal would give the regional government in Vitoria wide powers over justice, police, education and infrastructure, as well as recognising the Basque nationality.
It would set a precedent for Spain's economic powerhouse Catalonia, where all the main political parties have tabled their own proposals for far greater autonomy ahead of regional elections in mid-November.