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Tue 8 Dec 2015 12:11 PM

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UK stalls on approving Qatar-backed $35bn Heathrow expansion

British Prime Minister David Cameron further delaying the politically charged decision which has been 25 years in the making

UK stalls on approving Qatar-backed $35bn Heathrow expansion
(Getty Images)

British Prime Minister David Cameron is unlikely to give final approval for expanding Heathrow Airport as expected this month, further delaying the politically charged decision which has been 25 years in the making, an industry source said.

Cameron had promised a decision on whether to back the £23 billion ($35 billion) expansion programme by the end of the year but the person familiar with the process said this was now likely to come next year, possibly only after London's mayoral election in May.

"We now expect the final decision next year," said the source, speaking on the condition of anonymity due to the sensitivity of the issue.

The debate over a third runway at the airport has pitted environmentalists and voters in affluent west London against the country's biggest businesses and some politicians who see expansion as vital for economic growth.

Successive governments have failed to find a solution to the issue for 25 years, but with Heathrow operating close to capacity and rival European airports building stronger links to emerging markets, Cameron needs to act.

He had promised a final decision by the end of the year but on Monday his spokeswoman said he would provide a "clear direction". The BBC also cited senior sources very close to the process as saying more work was needed on the potential environmental impact.

It said that could take six months.

The prime minister ruled out a new Heathrow runway in 2009, saying "no ifs, no buts", but a government-appointed commission has since recommended a third runway, rejecting alternatives such as expanding Gatwick, south of London.

Any further delay is likely to dismay companies who demand better links to international markets, but it could ease the decision politically.

Cameron faces resistance both from within his own Conservative party and the opposition Labour party, whose leader and finance minister oppose it.

London Mayor Boris Johnson, a Conservative member of parliament, has said he would lie down in front of bulldozers to stop the third runway going ahead.

Johnson's potential successor as mayor, Zac Goldsmith, another Conservative MP, is also a prominent opponent of Heathrow's expansion, as is his Labour rival Sadiq Khan.

The mayoral election is due to be decided in May, meaning the final government decision on airport expansion could come after the vote.

Heathrow's chief executive told lawmakers in November he was confident that an expanded Heathrow would be able to meet EU air quality limits, promising that the airport would only use the new runway if it was clear that doing so would not delay compliance with those limits.

Campaign group Stop Heathrow Expansion says air pollution levels in some places close to Heathrow are already above the legal EU limits.

Another opposition group called Plane Stupid, which is opposed to any expansion of air traffic in the UK, has already disrupted Heathrow's operations.

In July, activists cut through Heathrow's perimeter fence and chained themselves on a runway, forcing some flights to be cancelled. Last month they brought chaos to road traffic around the airport by blocking the main entrance tunnel with a vehicle.

Heathrow, which is operating at full capacity, says a new runway would add £100 billion ($150 billion) to the economy and more than 120,000 new jobs.

The Commission preferred the new runway at Heathrow to the extension of Heathrow's existing northern runway or building a second runway at London Gatwick.

Heathrow's largest shareholder is Spanish infrastructure firm Ferrovial. Other partners include Qatar Holding, China Investment Corp and the Government of Singapore Investment Corp.

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