By Kylie MacLellan and Sarah Young
LONDON (Reuters) - Britain on Tuesday gave Heathrow Airport the green light to build a new $22 billion runway, ending 25 years of indecision and vowing to boost global trade links following the vote to leave the European Union.
Heathrow, Europe's busiest airport, had been battling with its smaller rival Gatwick for the right to expand, after successive governments failed to decide where to build the first new runway around London in 70 years.
"After decades of delay we are showing that we will take the big decisions when they're the right decisions for Britain," Prime Minister Theresa May told London's Evening Standard newspaper.
"Airport expansion is vital for the economic future of the whole of the UK."
The project, one of the biggest infrastructure programs in Europe at 18 billion pounds, is now likely to face legal challenges and a final vote by lawmakers in a year's time, meaning the runway can only open by 2025 at the earliest.
May's decision is one of her most significant since she took office in July and puts her in conflict with some senior ministers who oppose expansion over densely populated west London, including Foreign Secretary Boris Johnson, whose electoral constituency sits near Heathrow.
Heathrow is set to lose its ranking as Europe's biggest hub airport to Paris' Charles de Gaulle by 2020. With only two runways Heathrow is limited to 480,000 flights a year compared with the potential for more than 600,000 flights offered by rival European airports with more runways.
According to a three-year study by Britain's independent Airports Commission, a new runway at Heathrow would create 70,000 new jobs by 2050 and increase gross domestic product by between 0.65 and 0.75 percent over the same period.
ECONOMIC STIMULUS
The Confederation of British Industry, an employers group, said the new runway would benefit companies across the country.
"Pressing ahead with key infrastructure projects like this will provide not only a welcome economic stimulus, but will show the world that we are well and truly open for business as we negotiate our exit from the EU," CBI President Paul Drechsler said.
Heathrow's established links with emerging markets also strengthened its case in the wake of Britain's vote in June to leave the EU.
Heathrow is owned by Spanish infrastructure company Ferrovial, Qatar Holding, China Investment Corp and other investors, and the bill for expansion will be paid for by the private sector, with the government expected to pick up the tab for some of the additional road and rail costs.
The government said that the UK aviation regulator would work with Heathrow and the airlines to ensure the new runway plan is affordable and keeps landing charges paid by airlines close to current levels.
The new runway project, selected over a cheaper option to extend one of Heathrow's runways or build another runway at Gatwick, south of the capital, has in the past been criticized by Heathrow's biggest airline, British Airways, which objects to any big rise in charges it pays Heathrow.
The government also proposed legally binding noise targets to provide respite for local residents, many of whom oppose expansion due to worries over noise and air pollution.
"Heathrow stands ready to work with government, businesses, airlines and our local communities to deliver an airport that is fair, affordable and secures the benefits of expansion for the whole of the UK," the airport said in its statement.