LONDON (AFP) -- Britain's government will next month announce that Heathrow Airport, west of London, has failed in a bid to have a third runway built on its site because expansion there in the near future would break European Union pollution laws, the ***Financial Times*** said Saturday.

Southeastern England's first runway in almost two decades will instead be built at the much smaller Stansted Airport, east of London -- a move that is likely to spark a legal battle between major British airlines and the government, the business daily said.

British Airways and Virgin Atlantic claim that building at Stansted rather than Heathrow would largely benefit rival European airlines based at the smaller airport.

Transport Secretary Alistair Darling will officially announce the runway decision in mid-December when the government publishes a bill outlining its 30-year strategy for British aviation aimed at addressing an expected surge in air traffic.

A third runway could still be built at Heathrow within 30 years should technology aimed at better reducing pollution come on to the market, the government is expected to say.

The government believes that building a new runway at Heathrow in the short term would breach EU rules on emissions of the pollutant nitrogen dioxide.

Expansion at Britain's second largest airport, Gatwick, south of London, is prohibited until 2019 because of a local government deal, leaving Stansted as the only short term option for a new runway in southeastern England.