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Heathrow Airport can recover up to £320 million of early costs linked to its expansion plans, the industry regulator has said.

The UK Civil Aviation Authority also confirmed that a rival bidder for Heathrow’s third runway could recover some costs linked to its plans.

Last year, the aviation watchdog launched a consultation on the regulatory treatment of early costs of Heathrow expansion.

The CAA’s draft decision showed that Heathrow Airport Ltd, the company behind the UK’s largest airport, is allowed to recover early costs incurred during 2025 and 2026 linked to expansion plans up to a cap of £320 million.

The process is subject to statutory consultation.

It will allow Heathrow Airport Ltd to have the resources necessary to continue work on expanding the airport, the CAA said.

Early costs include those linked to planning and design needed to develop a credible plan to expand the airport.

It comes after the Government selected Heathrow Airport Ltd’s plan for a third runway, which will involve diverting part of the M25.

The airport’s plan is one of two proposals for the expansion, with the other from Arora Group, led by hotel tycoon Surinder Arora.

On Monday, the CAA confirmed that Heathrow West Ltd, Mr Arora’s business for his Heathrow runway plan, could also recover some early costs.

The regulator said it has allowed the business to recover up to £4.3 million of costs incurred up to November 25, when ministers confirmed it had missed out on Government backing.