Ministers to rethink decision to rule out runway after warning that trade will move elsewhere unless airport expanded

Radical options to increase airport capacity in the south-east – including developing RAF Northolt on the edge of London – are being urgently considered by the government amid growing fears that its decision to rule out a third runway at Heathrow is choking off economic growth.

According to senior sources, both David Cameron and George Osborne have been convinced of the need to act – and re-examine long-term policy on Heathrow – after being lobbied by overseas leaders and business figures who warn that trade will move elsewhere in the EU unless the airport is expanded.

While the coalition agreement rules out a third runway at Heathrow, which would never be tolerated by the pro-green Liberal Democrats, many Tories now want the party to admit the decision was wrong and back the new runway in the manifesto for the next general election. In the meantime, however, ministers have ordered officials to examine a series of other options. One is the use of RAF Northolt in Ruislip, north-west London, for business flights, to ease pressure on Heathrow, just 13 miles away. Developing Northolt – and perhaps connecting it to Heathrow with a high speed rail link – would allow the government to avoid accusations of a U-turn as the third runway would then be some distance from the main airport.

Tim Yeo, the Tory chairman of the energy and climate change select committee, said that he had "completely changed" his mind on Heathrow expansion and now believed there was no option but to build a third runway to ensure the south of England remained a worldwide aviation hub.

Reflecting the views of many in his party, he said: "We cannot wait around any longer. We have to get on with this. If we don't, the Chinese and others will take their business elsewhere. There is no time to delay."

Yeo, a countryside minister in John Major's government and a strong environmentalist, said that new EU rules which came into force in January and placed a cap on overall emissions for flights that start or finish in the EU had "changed the argument completely" and given ministers cover to change course.

"If we build a new runway, people can no longer say emissions will soar as there is a cap," he said. "I think there is a major rethink going on and there needs to be." He said that plans by Boris Johnson, the mayor of London, for a new airport in the Thames estuary, which are also being looked at by ministers, were "too expensive and in the wrong place".

Another alternative to expansion of Heathrow would be to build a second runway at Gatwick. Cameron provided a strong hint last week that this was on the table. "I'm not blind to the need to increase airport capacity, particularly in the south-east," he said. "Gatwick is emerging as a business airport for London under a new owner, competing with Heathrow. No construction work could start at Gatwick until 2019 but this would not stop officials drawing up plans to establish a framework."

In his budget speech on Wednesday, Osborne said that a landmark report on aviation policy, expected this week, had been delayed. Officials said this was to allow the announcement of a "call for evidence" on how the south-east could retain its "hub capacity".

The delay suggests that ministers are scrambling to formulate a coherent strategy for the future of Britain's airports and believe that the status quo is not an option.

Nic Ferriday of AirportWatch, which opposes airport expansion, played down the idea of RAF Northolt being used. "The runway would have to be realigned," he said. "It's also several miles from Heathrow." Complex air traffic control issues would have to be overcome.

Initial reports to government on Northolt's suitability also suggest problems, particularly with the runway length, although changes have not been ruled out.

Any indication that discussions on a third runway at Heathrow could be re-opened would spark a furore – particularly with Lib Dems who would see it as a betrayal of the green cause. Vince Cable, the business secretary, whose Twickenham constituency is on the Heathrow flight path, would oppose it vigorously. Justine Greening, the transport secretary and MP for Putney, Roehampton and Southfields in south-west London, would also resist a change of policy, having opposed a third runway before the last election.

Other Tories would also be strongly opposed. Speaking at a Guardian "open weekend" on Saturday Zac Goldsmith, the Tory MP for Richmond Park and North Kingston, said he would resign as an MP if the party did a U-turn.

Gareth Thomas, Labour MP for Harrow West, which would be affected by flights into Northolt, said there were clear signs that ministers were rethinking their strategy. "I think the government has to come clean and decide what it is going to do."

Last month, Heathrow's China traffic, including Hong Kong flights, fell 0.7%. In 2011, traffic grew 3%, compared with growth of 9% in Paris and Frankfurt. BAA, the airports operator, has campaigned for a third runaway at Heathrow, but its proposals have failed to gain traction.

The government's climate change committee will publish a report next week outlining the need for the UK to reduce its carbon emissions through a series of incremental cuts until 2050.