The Competition Commission (CC) also recommended that Spanish-owned BAA lose control of either Edinburgh or Glasgow airport.

In a preliminary report, the CC said there were competition problems at each of BAA's seven UK airports "with adverse consequences for passengers and airlines".

The CC report - with a final report on BAA's airport ownership due at the end of the year - effectively means that BAA will have to give up running Gatwick and Stansted as the commission made it clear that it was "unlikely to require the divestiture of Heathrow unless the sale of Gatwick or Stansted is likely to be impractical or ineffective".

BAA also runs Southampton and Aberdeen airports.

BAA was also critical of the Government aviation policy saying "aspects of Government policy restrict or distort competition by contributing to the current capacity constraints at BAA's London airports".
A number of companies have already expressed interest in taking over the running of any BAA airports that could come up for sale, including the Manchester Airports Group (MAG), which operates Manchester, Humberside, East Midlands and Bournemouth airports.

A spokesman for MAG said today that the group welcomed the commission's report.

He went on: "We have given evidence of our own experiences to the commission's inquiry and we believe that today's provisional findings are good news for passengers and airlines.

"MAG is an experienced, UK-owned airport operator with a strong track record in investing in the passenger experience, delivering efficient operations, a partnership approach to our business relationships, managing our costs effectively and a world-leading environmental performance.

"We have consistently stated that the group is interested in acquiring assets that will add value for our shareholders and this could include one or more of the BAA airports.

"We are currently examining the details of today's report before making any decision about future acquisitions."