The government is reportedly considering auctioning all or a limited number of take off and landing slots at an expanded Heathrow to improve competition and raise cash.

The disclosure, said by The Times to appear in a strategy paper from the Department for Transport, could result in runway access being sold to the highest bidders after Brexit.

The government said in its Brexit planning guidance that slot allocations would remain unchanged in the event of no deal.

The rights would be allocated in a “transparent and non-discriminatory way”.

But the DoT is understood to be seriously considering the adoption of an auction system, according to the newspaper.

The department’s aviation strategy, published before Christmas, confirmed that the government was considering “market-based mechanisms for release of additional capacity”, and added: “This could include auctioning all slots or a limited number that would be most sought-after.”

A House of Commons library paper from 2017 admitted that auctions “may be more difficult for small carriers with lower purchasing power”.

Iata head of worldwide airport slots, Lara Maughan, was quoted as saying: “Making airlines pay for entering or growing at an airport means consumers will be the losers.

“At a time when Britain is looking to improve its competitiveness and to build more connections to the world, these proposed changes will do the exact opposite.

“Extracting even more cash from airlines and their passengers will mean higher costs, less choice and less investment.

“The government’s stated objective to improve regional access to Heathrow would be irreparably damaged by an auction system that would force airlines to prioritise the most lucrative long-haul routes.”

British Airways owner International Airlines Group said: “We support Iata’s view that slot auctions would negatively impact consumers and undermine Britain’s aviation industry.”

A DoT spokesman said: “We have been clear that any slot allocation system should be designed to stimulate a competitive market and this is just one of a range of options.

“We are working with the aviation industry in considering any potential reforms to the system so it delivers the best outcome for passengers.”

Slot allocation is handled independently by Airport Co-ordination under EU regulations twice a year for summer and winter schedules, although they can be traded in a secondary market, often for vast sums. Grandfather rights entitle incumbent carriers to continue using a slot if it has been used for at least 80% of the previous period.