But the whole thing was predicated on the British knowing, without a doubt, that any intelligence that came the way of the Spanish would be immediately shared with the Germans. Franco may not have been sending troops (other than the Blue Division), but his intelligence service was working closely with the Germans.
Yes, absolutely. Further, being ethnically Russian, and therefore anti-Soviet, I can only thank Franco for the Blue Division. Generally, Francoism is a part of the Fascist movement, and had a natural sympathy for the Nazis in Germany; I wouldn't want to minimize that. Of course I entirely agree with you that prior to the invasion of Poland and France everyone, not just the fascists had a lot of sympathy for Hitler, and considered his shenanigans in Czechoslovakia and Austria internal German affair.