Business blasts plan to scrap third runway

Shadow transport secretary Theresa Villiers hailed her party for making a momentous decision to oppose expansion at the west London airport and instead back a high-speed rail link from London to Birmingham, Manchester and Leeds.

She delighted environment and residents' campaign groups but business leaders gave warning that blocking the runway could damage the City. Baroness Valentine, chief executive of London First, which represents 250 firms in the capital, said: "London could lose its crown to New York or to increasingly influential Dubai or Shanghai.

"Ruling out making it [Heathrow] bigger is a bad decision for a global city and the UK economy."

CBI director general Richard Lambert-added: "A high-speed rail link would have a lot going for it, but don't think for a minute that it will solve the capacity problems at Heathrow."

Opposing a third runway will boost dramatically David Cameron's green credentials, but the move was denounced by British Airways.

A spokesman said: "It is disappointing if the Conservatives are now saying they would turn their back on jobs and wealth creation, and put the UK's air links in a straitjacket."

BAA, the airport operator running Heathrow, also accused the Conservatives of overestimating fivefold the short-haul f lights that could be replaced by a TGV-style rail service. A spokesman said: "To prioritise one over the other is a false choice and will put Britain's future competitiveness at risk."

Unveiling plans for 190mph trains, Ms Villiers said her party had made a "seriously green decision" to "say No to a third runway". She urged businesses to think "very carefully" before getting involved in expanding Heathrow as a Tory administration would not be bound to honour the Government's undertakings.

She poured cold water on London Mayor Boris Johnson's plans for an island airport in the Thames Estuary.

The London Mayor told the Daily Politics Conference Special: "David Cameron this day in my view read the funeral rites over a third runway at Heathrow because we all know that the grim reality of politics is that there isn't going to be a Labour government in two years' time."

Under the first phase of the Tory plans, high-velocity trains would offer services from London St Pancras to Birmingham, taking 45 minutes, to Manchester (80), and to Leeds (97), plus a spur link to Heathrow.

The £20 billion project would open in 2027, possibly earlier for some stretches, and would need £15.7 billion of taxpayers' money, with the rest coming from the train operator.

John Stewart, chairman of Hacan campaign group, which opposes a third runway, added: "This announcement is a bold plan fitting for the 21st century." But Transport Secretary Ruth Kelly called axing the runway plan "politically opportunistic, economically illiterate and hugely damaging to Britain's national interests".