Expansion at Gatwick Airport was today believed to have been ruled out in favour of Stansted.

Developing Heathrow is believed not possible without breaking European pollution laws.

This would leave Stansted favourite to get the first new airport runway in the South-East for almost 20 years.

Gatwick is trailing as second favourite because of a legal agreement which prevents expansion until 2019.

The claims appeared as Government leaks in the Financial Times. British Airways has said if they are true, it will consider legal action.

The aviation giant said expansion at Stansted in Essex could only be viable if operator BAA increased landing charges at Heathrow.

As BA does not operate at Stansted, which is home to many low-cost airlines, the company claims its landing charges would effectively be spent on its competitors.

Transport Secretary Alistair Darling will publish a White Paper this month, spelling out how the South-East will cater for an estimated increase of 183 million air passengers by 2030.

Campaigners against the development of Gatwick today gave the leaks a cautious reception.

Brendon Sewill, chairman of the Gatwick Area Conservation Campaign, said the reports had been engineered by British Airways in an attempt to convince Mr Darling to back Heathrow expansion.

Mr Sewill said: "The Government has not made any decisions yet. The reports which have appeared in the press come from British Airways. Every inch of the story has appeared with a BA slant.

"They clearly do not want expansion at Stanstead, which would provide new opportunities for its competitors such as Ryan Air.

"The truth is we have no indication what decision has been made.

The Government's new anti-spin policy means everything is being kept very secret and confidential. But we are keeping our fingers crossed."

Andrew Cahn, director of Government and industry affairs at British Airways, said: "Building at Stansted first would be an historic mistake. It would delay the expansion of Heathrow for a generation and condemn British aviation to long term decline."

BAA said if Stansted was chosen, expansion may only be funded by operators using the airport, not Heathrow or Gatwick.

A spokeswoman said: "We think a single additional runway at Stansted could be funded on a stand-alone basis."

Officially, the Department of Transport would not confirm whether a decision had been made.