The chances of a smooth takeoff for Heathrow’s expansion plans were always slim, but an unexpected obstacle has arisen in the path of a third runway. Some of Britain’s biggest airlines have lent their voices to a rival proposal to develop Heathrow for about £5bn less than the airport itself declares necessary, fuelling a row over costs and throwing fresh uncertainty on the scheme.

A crucial vote on the government’s approval to expand the London hub is due this summer, but MPs were left confused after the airport’s main customers told them this week not to trust Heathrow with its £14.3bn budget for a new runway. Airline executives said the cost estimate could prove “grossly off target” and make the airport unaffordable as the overspends are passed on to carriers, and then passengers, via higher landing charges.

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Willie Walsh, the chief executive of IAG, the parent company of British Airways, which operates around half of all flights at Heathrow, told the transport select committee that a revised plan unveiled by the hotelier Surinder Arora was “a very credible alternative”. “He has more experience than anyone, including Heathrow probably, of building facilities at the airport, and at a fraction of the cost,” Walsh said.

Questions are being asked about why, nearly three years after the independent Airport Commission made clear Heathrow was the right choice for British airport expansion, the budget is still in doubt. The answer comes in a tweak to the government’s national policy statement on aviation in the autumn. The assumption that Heathrow would run its own development was removed, and the policy did not “identify any statutory undertaker as the appropriate person to carry out the preferred scheme”.

BA and its rival Virgin Atlantic led airlines in spotting a chance to cut costs, coalescing around Arora, who owns about 200 acres of land around the airport and buildings including Heathrow’s own corporate HQ, Compass House. Arora’s scheme would see that survive, along with 20% of the land earmarked for the expanded airport.

Arora’s main prize would be to develop and operate a terminal, something both he and BA say could alter the whole basis on which Heathrow is run, providing internal competition with the airport’s five other terminals. He has a track record for achieving spectacular ambitions from a modest start, coming to Britain from India at the age of 13 and building a guesthouse on the fringes of the airport into a property business operating franchises for a range of international brands at Heathrow and Gatwick.

Arora said: “We’re not here to spoil the party. The only thing we are saying is that we need to break the Heathrow monopoly. In the 21st century you can’t go ahead with this kind of project without any competition.”

BA and Arora argue that the way Heathrow is regulated gives it no incentive to keep spending down. The landing charges the Civil Aviation Authority allows it to set are linked to the value of its infrastructure, measured by the money invested. Walsh calls it a “perverse incentive to overspend”, because the higher the investment, the higher the fees that can be imposed on carriers.

Facebook Twitter Pinterest Surinder Arora is behind a rival, cheaper bid to expand Heathrow. Photograph: Martin Argles/The Guardian

For Heathrow, the idea of introducing competition is an unwelcome diversion. Its chief executive, John Holland-Kaye, is adamant that it would be a big mistake. ”It would set us back years. The French, Germans, Dutch are racing ahead – what the hell are we doing wasting time?” he said.

He described Arora as a good friend, but added: “This is a complex project. This is not building a hotel. We might make it look easy, but it ain’t.”

Walsh said: “I do strongly believe a third party could build another terminal, and operate it. It’s a model that works in other parts of the world.”

Holland-Kaye said examples of terminals operated by another company, led by New York’s main airport, were not encouraging. “JFK? It’s a mess! Or Munich. Lufthansa protect their dominant position and the other airlines pay for it. [Walsh] might want it but it’s not in the interests of anyone else.”

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Walsh said Arora had “set a benchmark” for costs, his views on Heathrow’s accounting underlined by a £1bn dividend announced this week. He said: “The bottom line is that Heathrow wants free rein to spend as much they can and get more for it. They’ve been very handsomely rewarding their shareholders.”

How strongly the airlines or Arora believe that they can wrest the development from Heathrow is debatable, but the plan increases pressure on the airport, which says it has revised its plans down to expanding terminals rather than building a new one, removing huge expenditure on underground transit systems for people and baggage.

Arora said it was prepared to submit a rival planning application if the airport refuses to play along. Holland-Kaye suggested Arora could well end up winning contracts either way: “I’m sure we will all get something out of it.” If MPs back expansion formally, Heathrow will need to consult further on the details before submitting plans, with final approval not expected before 2021. A third runway is not expected to be operational before 2025 at the earliest.

The row remains a curveball at a moment when Heathrow appeared to have won over some, if far from all, of its neighbours. Some, ground down by uncertainty that has lingered for a decade, see silver linings: improved compensation or house insulation , and sharing the pain of flight paths around London. Holland-Kaye said: “Even those who oppose us want certainty. It’s in all their interest to just crack on with it.”