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A bombshell Government study found Heathrow’s third runway would not benefit British residents as much as a second runway at Gatwick, the Evening Standard can reveal.

The cost-benefit analysis concluded that when benefits to overseas travellers and firms were excluded, British people and firms could gain up to £4 billion more in advantages if rival Gatwick was chosen for expansion.

The findings of the study - conducted by Department for Transport (DfT) officials using standard Whitehall methods - were buried in the annexe to a report published when Transport Secretary Chris Grayling announced Government backing for the third runway.

The full report went to the decision-making Cabinet committee chaired by Theresa May, said the DfT, but it was not circulated to the full Cabinet when members held its own debate on airport expansion a week earlier.

Anti-third runway campaigners said the disclosure left the economic case for Heathrow “in tatters”.

Former Cabinet minister Theresa Villiers said: “It’s astonishing that Ministers could have signed off on this project when even the Government’s own figures say Gatwick is the better option for UK residents.”

In his Commons statement last week, Mr Grayling said Heathrow’s north- west third runway plan was chosen because it offered “the largest benefits to passengers and the wider economy, of up to £61billion over 60 years”.

However, the Further Review and Sensitivities Report makes clear that these benefits include impacts outside the UK as well as the value to overseas travellers using Heathrow as a hub to pass through.

When the UK-only benefits were calculated, they estimated that a third runway would bring benefits of between £5.8 billion and £9.9 billion. But they predicted Gatwick expansion would be worth £8.9 billion to £10.3 billion to U.K. residents.

Other startling findings from the detailed report include:

Mr Grayling’s case for a third runway included an estimate for the extra costs of road and rail links to Heathrow as being just £3.4 billion or less - a much smaller sum than the Airport Commission estimate of over £5 billion and Transport for London’s claim that they could cost farepayers £10 to £15 billion.

An overrun in Heathrow’s costs of just one per cent could be enough to negate the overall benefits of the scheme. By contrast the analysis found Gatwick, which would cost half as much, would still offer benefits if costs rose by 44 per cent.

The UK-only figures did not form part of the DfT’s central case for a third runway because, according to officials, they should be seen as “no more than indicative” and were “of low analytical assurance”.

But Zac Goldsmith, who is fighting a by-election to protest at the third runway plan, said: “The case for Heathrow is falling apart before our eyes.

“Yesterday it became apparent it would fall foul of air quality requirements. Today we see the economic benefits to British people are much smaller than offered by Gatwick. The Government has been herded into a quagmire by vested interests. They need to step back.”

John Stewart, of anti-expansion group Hacan, said: “It seems the Government has put the interests of hub passengers changing planes at Heathrow before anything else.”

However a DfT spokesman insisted: “Heathrow offers the greatest benefits. The independent Airport Commission report was very clear that it is the best scheme.

“The central case of our report also shows the benefits of Heathrow are higher than for Gatwick with Heathrow expansion estimated to benefit passengers and the wider economy by £61billion and could create up to 77,000 jobs and 10,000 apprenticeships by 2030.”