BAA could be forced to sell one of 'big three' airports

It comes amid criticism that the lack of competition is leading to appalling conditions, frequent delays and overcrowding for passengers in the South-East.

The Competition Commission said today it is going ahead with a full investigation of BAA's ownership.

Aviation experts believe that Gatwick is the most likely candidate for a sale and could fetch £3billion.

BAA would be reluctant to give up the "crown jewels" of Heathrow, which makes it around £600 million profit a year, and it has major expansion plans for Stansted. Any auction would be certain to attract huge global interest.

As well as the big three, BAA owns Southampton, Glasgow, Edinburgh and Aberdeen. The seven airports are used by about 60 per cent of all passengers flying in and out of Britain.

But most concern centres around its control of Heathrow, Gatwick and Stansted which account for 90 per cent of passenger journeys from the South-East. Critics, including airlines such as BA and Virgin Atlantic, say lack of competition has led to "lamentable" performance by BAA resulting in today's "not fit for purpose" terminals.

The airports were government owned until privatisation in 1987. The current owners, Spanish construction giant Ferrovial, argues that only a company of its size can deliver major investment programmes such as new runways or Heathrow's fifth terminal.

It claims that delays and overcrowding at the airports are the result of planning delays and governmentimposed security measures rather than its own poor management.

An inquiry began in May last year when the Office of Fair Trading announced a preliminary "market study" just days after Ferrovial unveiled a £9billion takeover bid for BAA which went up to £10billion.

In March the Office of Fair Trading said it had "reasonable grounds" to suspect the BAA's ownership of the airports was distorting competition. It referred BAA to the Competition Commission for a fuller inquiry.

There will be pressure on the Commission to come up with a radical solution following criticism of BAA. Ken Livingstone said Heathrow "shamed" London, while City minister Kitty Ussher said "Heathrow hassle" was hitting British industry.