Heathrow must expand says Kelly

In her most forthright comments yet on the the issue, Ms Kelly said: "I think Heathrow is essential to our international competitiveness. We need an efficient international hub airport in London. It underpins the growth of the financial services industry which is the power house of London's economy - and the UK as a whole."

Ms Kelly has been criticised by green campaigners including the Tories' environment adviser Zac Goldsmith for supporting expansion at Heathrow.

A consultation on the subject will be launched next week, when Ms Kelly's department will seek the public's views on the introduction of "mixed mode" - where the existing two runways are used for both take-off and landings - and the building of a third runway and a Terminal Six. This would see the number of flights rise from 480,000 a year to more than 700,000.

Asked whether she thought that the protesters who gathered near the airport in the summer to oppose the expansion were wrong, Ms Kelly said: "Yes, I do." She claimed the concerns of residents living under the flight path would be met by reduced noise from modern aircraft.

Ms Kelly also signalled her personal opposition to restrictions on flights, saying: "My approach is to give people alternative options. If you get these things right you can bring down CO2 and give people a choice in how we achieve lower emissions. We shouldn't be in the business of telling people what the right solution for them is."

Mr Goldsmith has attacked government plans to rely on a European Trading Scheme for carbon emissions, claiming that it was unreliable. But Mr Kelly said: "There are those who say let's ration it unilaterally - in which case, your permits simply go to countries who will use them. You lose the jobs and growth and others get it. There is zero impact on the environment."

Following criticism over disruption at Heathrow this summer, Ms Kelly said a consultation paper would be published next week on the experiences of travellers in and out of London. "We have to think about the time it takes passengers and the reliability of their experience," she said. "You have to start with the passenger."

And in a week when questions have been raised about the delay in announcing the financing and corporate governance details for Crossrail, Ms Kelly said full details would be published "in the next few days".

However, she refused to discuss a possible extension of the line to Stansted. "The priority now is to start to get it built. At some point there can be arguments about extending it and what the cost would be."

She also gave the strongest signal yet that the Government is in retreat from road pricing, saying it was not likely to be brought in within the next 10 years. She said: "I would rather we looked at congestion schemes for urban areas affected in the short term... It should be for local areas to come forward with proposals."

On the railways, Ms Kelly said: "I want to make basic commuter improvements a priority: getting more carriages, more frequent routes and the question of travelling in comfort right."

Asked about Metronet - the public private partnership company whose collapse highlighted weaknesses in one of Gordon Brown's key policies - Ms Kelly said, "One of the lessons for me is that we didn't have incentives for shareholders to take action earlier. Costs were allowed to escalate without it being clear whose responsibility it was. Could we have systems in place where that came to light earlier? Yes we could."