China Investment Corporation has bought a ten per cent stake in the firm that owns London Heathrow airport.

The Chinese sovereign wealth fund bought the stake in Heathrow Airport Holdings, which also operated other UK airports including Stansted, Southampton, Glasgow and Aberdeen.

CIC was set up in 2007 to invest some of foreign exchange reserves from China.

Earlier this year CIC bought a 8.68 per cent stake in the firm behind UK utility group Thames Water.

The latest airports deal will see the fund pay £450 million for a 10 per cent stake in Heathrow Airport Holdings.

Until last month, the firm was known as BAA.

Under the terms of the agreement it will buy a 5.7 per cent stake in FGP Topco from Spanish firm Ferrovial for £257.4 million.

FGP Topco is the holding company which owns Heathrow Airport Holdings.

CIC will get the remaining 4.3 per cent stake from other shareholders of FGP Topco Ltd at a cost of £192.6 million.