Poor aviation links could cost Britain £14 billion in lost business over 10 years, a Heathrow airport-commissioned report has said.

Lack of direct flights from the UK to emerging markets may already be costing the UK £1.2 billion a year as trade goes to better-connected competitors, the report said.

This figure could rise to £1.6 billion by 2021 - equivalent to one-third of the UK's current balance of trade deficit, the report added.

``The net present value of this missed opportunity to the UK economy over the next 10 years totals £14 billion at a conservative estimate,'' said the report by economic consultants Frontier Economics.

The report comes in response to the consultation on aviation policy by the Government which has ruled out more aviation capacity in south east England which has meant reversing Labour's go-ahead for a third runway at Heathrow in west London.

The report said Britain ``risks being cut off from global growth'' and becoming ``a less competitive place to do business'' because it is losing out to European competitors in the battle for flights to emerging markets.

It said that if Heathrow's capacity remained constrained, Heathrow was likely to lose its position as Europe's busiest airport by 2021, falling to third behind Frankfurt and Paris Charles de Gaulle, with Amsterdam Schiphol airport close behind.

The report established a direct relationship between frequent direct air connections and improved volumes of trade and investment.

It found that UK businesses trade 20 times as much with emerging market countries that have a direct daily flight to the UK as they do with those countries that do not.

However, the report warned that only a major transfer hub was able to serve such destinations, and because the UK's hub airport at Heathrow was full, Britain was missing out on opportunities for trade and falling behind European competitors.

The report found that Paris and Frankfurt already had 1,000 more annual flights to the three largest cities in China than Heathrow.

It also found that there were 21 emerging market destinations with daily flights from other European hubs that were not served from Heathrow, including destinations such as Manila, Guangzhou in China, and Jakarta.

Colin Matthews, chief executive of Heathrow's owners BAA, said: ``The Government has asked the question: 'Is a hub airport important to the UK?' This research answers that question with an emphatic 'yes'.

``The centre of gravity in the world economy is shifting and Britain should be forging new links with emerging markets.

``Instead, we are edging towards a future as an island cut-off from some of the world's most important markets.''

Mr Matthews went on: ``The opportunity for the UK to establish itself as the leader in Europe in its connections to India, China and other important markets still exists.

``But if Britain is not to lose out to international competitors, we need an aviation policy from Government that recognises the role of a hub airport in supporting growth - and we need it quickly.''

Responding to the report, Aviation Minister Theresa Villiers said: ``Both coalition parties had an electoral mandate to cancel Labour's plans for a third runway at Heathrow.

``We are keeping the promises we made and we are determined to deliver a new approach to aviation policy - one that ensures the aviation sector both supports economic growth and addresses the environmental impacts of flying.''

She went on: ``We are consulting on a wide range of aviation issues and this report will provide a valuable contribution to this process.

``A successful Heathrow is a key part of any aviation strategy, which is why we are taking active steps to improve the way the airport works.

``Heathrow continues to be a highly successful airport and there is every reason to believe it will continue to be so.''

Simon Buck, chief executive of UK airline trade body the British Air Transport Association, said: ``This report clearly shows that the Government's policy of constraining growth at the UK's only hub airport puts at risk Britain's ability to trade with emerging world economies and seriously impacts on Government ambitions for an export-led recovery.''

He went on: ``Such constraint costs the UK economy over £1 billion per year and puts many thousands of UK jobs at risk. Ministers need to wake up from their obsession with planning hugely-expensive, publicly-funded national railway schemes and recognise the urgent need to permit privately-funded investment at our overcrowded London airports in order for the UK to compete for business with the rest of the world.

``The need for Britain to develop and maintain international trade links with the rest of the world is far more important than any short-term electoral advantage that may be gained by 'here-today-gone-tomorrow' politicians from the banning of new runways.''