BAA has formally conceded defeat in its campaign for a third runway at London’s Heathrow Airport by withdrawing its planning application.

The airport operator has also pulled its application for a second runway at Stansted following the election of the new government.

The move by BAA was a formality, since both the Conservative and Liberal Democrats had opposed new runways.

But it hasn’t ruled out expansion in the long term and is continuing to buy homes on sites where the runways were set to be built.

BAA’s chief executive Colin Matthews said: “We recognise the importance of government policy in a matter as significant and controversial as runway capacity.”

But added: “We continue to believe that new capacity would strengthen the UK’s trading links with the global markets on which our economy and our competitiveness depend.”

BAA, supported by airlines and commerce in the capital, had argued that Heathrow needed extra capacity and without it London - and consequently the UK - would lose out to rival European cities as a place to visit and do business.

Plans for expansion at both Heathrow and Stansted were laid out in the government’s 2003 aviation White Paper.

The Conservatives opposed the plans, preferring improved rail links to and from Heathrow, including a new London-to-Scotland high-speed rail line.

Local residents and environmental campaigners had also protested against the expansions.