Plans for a £344m expansion of London's City Airport have been given clearance by the Government.

The decision, the Treasury said, would see the creation of 1,600 jobs and potentially add £1.5bn to the UK economy by 2025.

It was made against the backdrop of local opposition on environmental grounds and furious debate over airport expansion in the South East.

While City Airport's investment would allow for more flights, the Government is under pressure to make a decision on which major airport, between Heathrow and Gatwick, is to get a new runway.

The plans for the Docklands airport allow for an extended terminal, new aircraft taxiway and parking spaces for planes at what it calls "one of the capital's fastest growing airports".


The Chancellor, Philip Hammond, made it clear that the UK's vote to leave the EU was a factor behind the decision.

He said: "London City Airport's ambitious growth plans will boost international connections, strengthening the City of London's links to destinations across the world, and send a clear signal that Britain is open for business.

"Making it easier to visit and do business in the City of London will help drive forward our economy and further strengthen the city's status as the world's leading financial centre.

"This is a real vote of confidence in the resilience of our economy, creating over a thousand new jobs."

The airport's sale - by Global Infrastructure Partners to a consortium including Canadian pension funds and Kuwait's investment arm - was agreed earlier this year for a sum of £2bn.

City carried 4.3 million passengers in 2015 - an 18% rise on the previous year - and plans to double passenger traffic by 2030.

Its ambitions drew protests from residents who feared more noise and pollution.

They were supported by former London mayor Boris Johnson but his successor, Sadiq Khan, withdrew City Hall's objection to the airport buying land that it needed for its expansion.

The Government said the airport would provide a "generous" compensation package to local residents affected by increased air traffic.