LONDON (REUTERS)

Britain has backed Heathrow Airport's 49 billion pound ($64 billion) expansion and upgrade plan as the basis for adding a new runway, choosing it over a cheaper rival proposal, the government said on Tuesday.

The decision follows finance minister Rachel Reeves' pledge in January to build a third runway at Heathrow, aiming to boost economic growth and end decades of uncertainty over the airport's future.

The headline figure includes around 15 billion pounds ($20 billion) of upgrade work already planned and the cost of building the runway, re-routing London's orbital motorway and adding a new terminal is about 33 billion pounds ($44 billion).

The UK government has thrown its weight behind airport projects this year, giving the green light for a runway at the country's second-biggest airport Gatwick to be brought into regular use in September, and backing a new terminal at Luton in April.

Located west of London, Heathrow is Europe's busiest airport and operates at full capacity. Its two runways compare with four each in Paris' Charles de Gaulle and Frankfurt Airport, and six at Amsterdam's Schiphol.

Flights from Heathrow's new runway are targeted for 2035, with planning consent required by 2029. The government said it chose Heathrow's full-length runway plan as the "most deliverable option" to meet those deadlines.

A "swift and robust" policy review on Heathrow expansion will help shape plans in line with Britain's climate obligations, the government said, as it aims to see off potential legal challenges over air quality and emissions which have thwarted it in the past.