It implied that no peace treaty could be agreed with Britain's principal enemy Louis XIV of France that allowed Philip, the French candidate, to retain the Spanish crown.
The Whigs were buoyed by the campaigns in the Low Countries where the British commander, the Duke of Marlborough, led the Allies to a series of victories.
The Whigs demanded that King Louis be made to abandon his expansionist policies, and renounce any attempts to make Spain a satellite state.
However, lack of support from the local population meant Charles entered an almost deserted city and the Allies were effectively isolated when Portuguese forces were prevented from crossing into Spain.
Committed to ending Britain's involvement in the European war, which had been costly in lives and money, it took steps to disengage, which eventually resulted in the dismissal of the hawkish Marlborough, who was replaced by the Irish Tory commander, the Duke of Ormonde.
A major stumbling block had been an earlier demand for Louis XIV to assist, by force if necessary, to drive his own grandson from the throne of Spain.
Still using the slogan of "No Peace Without Spain", Britain's former allies such as the Austria and the Dutch Republic tried to fight on but suffered defeats without the financial and military support that had been provided by London.
General Stanhope, a Whig, who had commanded in Spain and vigorously opposed the peace became chief minister and the architect of Britain's post-war foreign policy.
Before long the two countries were fighting together against a revived Spain under Philip, who was trying to overturn the Treaty of Utrecht and recover lost territories abroad.
However, some younger Patriot Whigs such as William Pitt saw the compromise peace as leading to the later Franco-Spanish Alliance which caused Britain many problems throughout the 18th century.
Despite the prominence at the time of the "No Peace Without Spain" debate, the war in the Iberian Peninsula has largely been neglected by historians who have chosen to focus on Marlborough's Flanders campaigns.