Picardo also accused Spanish Prime Minister Mariano Rajoy's Popular Party government of trying to divert attention from a corruption scandal with a dispute over an artificial reef built by Gibraltar.
"One of the things that the Spanish government has achieved in the past ten days is that Gibraltar has been in the front pages of newspapers instead of the corruption allegations against Mr.Rajoy personally and against the Popular Party," he said in a reference to accusations that Spain's ruling party made undeclared payments to Rajoy and other top officials from a slush fund.
Rajoy has denied the allegations and on Wednesday the centre-right Popular Party's secretary general testified at a Madrid court investigating the allegations.
Tensions over the territory on Spain's southern tip rose last month after Gibraltar dropped 70 concrete blocks into the contested waters off its coast with the aim of creating an artificial reef. Madrid accuses Gibraltar of creating the reef to prevent Spanish fishermen from casting their nets in the waters around the British territory and has responded by beefing up border controls with Gibraltar, causing tailbacks of cars lasting several hours.
Spain said Monday it is considering taking its dispute over Gibraltar to global bodies such as the United Nations and International Court of Justice at The Hague.
"At last Spain is thinking about accepting our challenge. Nothing could make me happier than to take all of these issues to court," said Picardo, who was born in Gibraltar, at his office which is decorated with a photo of Britain's Britain's Queen Elizabeth II.
"I have been challenging Spain to take the issues in dispute to the international courts. The International Court of Justice at The Hague for the sovereignty issue, the International Tribunal for the Law of the Sea with respect to the waters around Gibraltar. I am delighted to go to the European Court of Justice for the habitat issue.
"I hope that we migrate the issues from the frontier, where (Spanish Foreign Minister Jose Manuel Garcia) Margallo and the Kingdom of Spain are making the lives of innocent people very difficult because of the disputes that we have. Let's get those things away from there and into court where we should have the argument in a civilized way."
Spain ceded Gibraltar to Britain in perpetuity in 1713 but has long argued that it should be returned to Spanish sovereignty.
Madrid insists the treaty only granted waters in the port of Gibraltar to London and did not cede the three nautical mile stretch claimed by Britain.
"From 1704, that is nine years before the Treaty of Utrecht, the waters around Gibraltar have been British by dint of the cannon shot rule, because nobody would come within three miles of Gibraltar because the British cannons would reach them," Picardo said.
Britain on Monday threatened to take legal action over the checks on the Gibraltar border, which Spain argues are needed to fight smuggling.
Gibraltar has "100 percent support of the British government", said Picardo, who heads the Gibraltar Socialist Labour Party and was elected chief minister in December 2011.
The Spanish government is taking a "very negative approach", he said.
"There is no communication today institutionally between Gibraltar and Spain because Spain doesn't want it. I have three telephones on my desk. I would be happy to take Mr Rajoy's call on any of them or Mr Margallo's call on any of them," said Picardo.
"Gibraltar is ready to talk to Spain at any time, on any issue. Except sovereignty," he added.