Britain immediately needs new airport capacity to remain competitive and must consider “mixed mode” operations at Heathrow, the City of London Corporation has said. Unveiling a report from consultants York Aviation, the Corporation suggests a short-term fix to congestion would be to use the two runways for both take-offs and landings. Currently each runway is restricted to one or the other.Allowing “mixed mode” would raise aircraft movements to around 525,000 a year from the current cap of 480,000, mounting yearly passenger capacity by 10m travellers.

However, the option is not popular with inhabitants, due to extra aircraft noise, and has been dismissed by the Coalition Government.

Stuart Fraser, policy chairman at the Corporation, urged the Government to examine such options in the wake of its controversial, though voter-friendly, decision to block a third runway at Heathrow or a second one at Stansted.

“Our competitive edge is being eroded as we wait for decisive action to upgrade our aviation infrastructure,” says Mr Fraser whose Corporation champions financial and other businesses based in the Square Mile.

“The government’s aviation policy review should recognise extra capacity is needed now even though it may require potentially unpopular decisions,” he added.

“With the possibility of a third runway at Heathrow and a second runway at Stansted currently blocked, other options such as mixed-mode operation should be seriously considered. This would, however, only be a temporary fix.”

London airports have experienced falling demand, particularly from business travellers, since handling 140m passengers in 2007. However, a revival is under way.

Mr Fraser’s concerns echo those of London Mayor Boris Johnson who last week said that, for the capital to remain “the heartbeat of global business”, new aviation links were required.

He said the quantity of destinations that can be directly accessed from Heathrow was now 157 compared with 224 from Paris’s Charles de Gaulle airport and 235 from Frankfurt.

The Corporation’s report also considers the development of a new airport in the Thames estuary and the spreading out of London City Airport. Nevertheless it finds that new airport capacity at Heathrow remains the favoured option of City businesses, accounting for 44pc of journeys.