The £5 billion auction of London's biggest airports unofficially got under way today as BAA was told it must sell two out of Heathrow, Gatwick and Stansted to stop it having a monopoly.

The Competition Commission said the three airports must compete against each other and the only way to achieve this was to force BAA to sell two.

BAA, which was taken over by Spain's Ferrovial in a £10.3 billion deal two years ago, will not sell Heathrow, which is the jewel in its crown.

It refused to admit that it will start any auction process until the Competition Commission reaches its ultimate ruling early next year. But it is understood to have received several early approaches from trade and privateequity buyers.

Candidates to buy the two London airports , and whichever of the Scottish airports at Glasgow and Edinburgh BAA is also forced to sell, are thought to have their plans well advanced.

Analysts believe Gatwick, the biggest holiday airport, would fetch between £2 billion and £3 billion while Stansted is likely to be worth £1 billion to £2 billion. Glasgow, the more profitable of the Scottish airports, could fetch several hundred million pounds.

Potential bidders include Manchester Airport Group, which would not be able to finance a bid on its own and has approached US and UK private firms for backing.

Frankfurt airport operator Fraport is also well in the running, as is German infrastructure group Hochtief.

Global Infrastructure Partners, the joint venture between Credit Suisse and General Electric which owns City Airport, is another likely bidder. So too could be Australian infrastructure giant Macquarie. Ryanair chief executive Michael O'Leary today firmly ruled out his airline bidding for Stansted "or any other airport". As if to emphasise its reluctance to sell anything, BAA claims not to have appointed any investment bank to advise it on any disposals.

But Royal Bank of Scotland and Citi, which worked together for months to secure a £13.3 billion long-term refinancing package for the airports operator, must be in prime position to handle any sell-off.

BAA sources emphasised it would hold out for high prices if the auction is confirmed next year. "These are incredibly scarce resources," said one source.