In July 1936 Spanish nationalists staged a <<coup d'etat>> against the Republican government. In the civil war that followed, both nationalists and republicans split into a number of factions, with General Francisco Franco emerging as the pre-eminent nationalist leader. The civil war soon became a proxy war among some of the great powers - Germany and Italy provided military assistance to Franco, while the USSR helped the republicans. In 1939, marked by numerous atrocities against civilians, the war ended with victory for Franco's nationalists.
Britain's policy towards the war was one of non-intervention. The aim was to ensure that the war did not lead to a more general European conflict. Britain wanted to maintain the status quo in the western Mediterranean as it had interests in Gibraltar and British companies had mining interests in Spain. The overall aim was therefore to have good relations with the emerging government.
With the support of the French Prime Minister, Leon Blum, Stanley Baldwin called for the European powers to abstain from intervening in Spain. Twenty-seven countries, including Germany, Italy and the USSR, signed a non-intervention agreement in September, although Germany, Italy and the USSR subsequently ignored it. Later, the Cabinet was divided on the status of the belligerents. Hoare wanted recognition to be extended to the nationalists, but Anthony Eden, who became Foreign Secretary in December 1935, argued that this should be postponed until Franco had control of Madrid.
British policy aimed at maintaining relations with Italy, although there was a shift in emphasis over the possibility of Italy seizing the Balearics. Attacks on merchant shipping by Italian submarines in the western Mediterranean caused further tension and at the Nyon conference in September 1937, Britain and France agreed to use patrols to protect commercial shipping. During April 1937 the British Navy protected ships off the northern coast of Spain during Franco's blockade of Bilbao.