Prince Charles and Lady Diana Spencer still intend to begin a honeymoon cruise on the Mediterranean by boarding the Royal Yacht Britannia in the British colony of Gibraltar on the southern tip of Spain, even though it means that Spain's King Juan Carlos will boycott their wedding in protest.

The king made his decision known to Buckingham Palace yesterday after frantic but fruitless efforts by Spanish officials to persuade the British government to stop the royal couple from making such a highly publicized visit to the territory long claimed by Spain. The Spanish foreign minister even approached British Foreign Minister Lord Carrington about it at the Ottawa summit meeting.

But Deputy Foreign Minister Sir Ian Gilmour told Parliament here today that the government was not about to disrupt the honeymooners' plans. "We are talking about the honeymoon of the prince of Wales and Lady Diana Spencer," he said. "It is their honeymoon and no one else's. It is for no one else to interfere with it."

It is the latest and by far most serious of a number of controversies that hve frayed the edges of the royal wedding tapestry a week before the ceremony. Others have ranged from fees being demanded by St. Paul's Cathedral for television access to the ceremony to the propriety of the archbishop of Canterbury publicly discussing his advice to Charles and Diana about the role of sex in marriage.

King Juan Carlos and Queen Sophia were to have participated in a majestic processin of European royalty in St. Paul's, and their names were already printed in the officiali order of service and souvenir program. They and their children would have stayed at Buckingham Palace of Windsor Castle as personal guests of Queen Elizabeth II and Prince Philip, along with the other remaining crowned heads of Europe. The Spanish king and queen also were scheduled to watch Prince Charles and England play Spain in polo on Sunday (the prince still will play and will be watched by, among others, Nancy Reagan).

The trouble began a few days ago when it became known that Charles and Diana, after spending the first two days of their honeymoon at the estate of the late Lord Mountbatten in the Hampshire Hills southwest of London, would fly to Gibralter to board the Britiannia for a two-week Mediterranean cruise.

Spanish officials said Madrid saw this as a provocative step by the British at a time when the two governments have been locked in diplomatic argument over the future of the rock, which the British have ruled since seizing it in 1704. Although British officials pointed out that the royal couple would be there for less than two hours, officials in Gibraltar said they expected most of the 27,000 Britons there to come out and cheer them on their way through the streets.

Britain and Spain have been trying to negotiate an agreement to end the blockade of the peninsula -- dominated by the familiar Rock of Gibraltar -- from the rest of Spain. The blockade was begun by the late Spanish dictator Francisco Franco. Britain also has been an active advocate of eventual Spanish entry into the European Common Market to help bolster Juan Carlos' efforts to promote and maintain post-Franco democracy in Spain.

For these reasons, diplomats here today tried to play down the incident, pointing out that Gibraltar was the only logical place for Charles and Diana, flying in a royal plane, to land on British territory and transfer to the royal yacht for a Mediterranean cruise. They said this consideration ruled out last-minute suggestions by the Spanish government that the British royal couple board the Britannia in a southern port like Malaga.

"I would like to deprecate the suggestion that we are discussing a major diplomatic row," said a senior British official. "We are discussing a private visit by the prince of Wales and private staging in a particularly private journey."

But it has become a major row, splashed across British front pages and fueled by jingoist reactions from British members of Parliament. "Gibraltar is still British after all," said Lord Bethell, who successfully pushed through the House of Lords today an amendment to pending legislation guaranteeing all residents of Gibraltar full rights as British citizens. "The queen," he said, "is still the queen of Gibraltar."

The fuss was embarrassing and an unnecessary nuisance for Buckingham Palace, where officials said they were already near the point of pani with the wedding day fast approaching, even without having to redo everything connected with the visiting crowned heads of Europe.

They will now hve to content with the kings and queens of Belgium, The Netherlands, Denmark, Norway and Sweden, Grand Duke Jean of Luxembourg, Prince Franz Joseph II of Liechtenstein and Prince Rainier and Princess Grace of Monaco. Besides being the last remaining reigning monarchs of Europe, along with the restored monarchy in Spain, most of them are related to the British royal family through either William of Orange, the 17th monarch of both Britain and Holland, or Queen Victoria and her nine children.

Signs of the approaching festivities can be seen throughout London and other British cities, towns and villages. Flags, bunting and baskets of flowers are up along main streets and over the two-mile wedding procession route through London, from Buckingham Palace to St. Paul's. Each new detail and tidbit of gossip about the wedding day and the royal couple is being given prominent media play as the country warms to at least a midsummer respite from it mounting economic and social problems.

"No more riots. England wins third test. Royal wedding next week," declared the chalkboard advertising the fare outside a popular wine bar on London's trendy Kings Road in Chelsea. "Now you must come in and celebrate!" Britain's cities were once again quiet, if still tense in places. England's much-maligned national cricket team had won a thrilling come-from-behind match against archrival Australia. And the wedding was finally at hand.

But nothing seems to go quite as well as expected here these days, and the royal wedding was no exception, even before the flap over King Juan Carlos. The influx of foreign tourists has been disappointing, apparently because television coverage of the wedding will be so extensive worldwide, so hotel and restaurant owners are complaining. The national holiday declared for the wedding next Wednesday comes in the middle of the week, which means an expensive disruption of production for Britain's already hard-pressed industrialists.

The church of England clergy who run St. Paul's Cathedral have been haggling with Britain's two television networks over the fee for relaying pictures from the cathedral to the rest of the world (the cathedral's dean and chapter reportedly want $100,000 from each network), while some Britons are complaining because both BBC television channels and the independent network will be screening nothing but the wedding. c

Buckingham Palace is reported to be upset both about the unseemly argument over the cost of television rights and the archbishop of Canterbury's revelation to reporters that he had discussed the role of sex in marriage in his pre-nuptial chats with the royal bride and groom. The Rt. Rev. Robert Runcie said he told them that sex is "a good thing given by God but nevertheless, like all God's gifts, it needs to be directed aright."

To guard against any more slip-ups, Prince Charles has insisted thate he review a videotape of himself and Lady Diana by correspondents from the two British networks before allowing it be be broadcast on the eve of the wedding. The interview is scheduled to be recorded in a Buckingham Palace drawing room today.

Other steps are being taken to hold down the wedding's cost to the queen and the government, now estimated at more than a million dollars. In addition to using flags and bunting from previous royal occasions, government decorators of the procession route have kept up 42 flagpoles from Saudi King Khalid's recent visit and painted them blue for the wedding. The flowers and plants being placed along the mall from Buckingham Palace to Trafalgar Square will be returned to the royal parks.