Heathrow has been dubbed a “second tier” airport by the chairman of parent company BAA following the coalition government’s decision to block plans for a third runway.

Sir Nigel Rudd was reported at the weekend as saying that the UK risked becoming “less competitive” as a result.

BAA’s major investors, Spanish infrastructure giant Ferrovial and the Government of Singapore Investment Corporation (GIC), did not understand the decision, one of the first made by the new government.

Interviewed by The Sunday Telegraph, Sir Nigel said that, although he realised the decision was “political”, it was now harder to see how the UK will compete with the rest of Europe.

He said: “Heathrow is full. I am a strong believer in democracy, and the Government has been elected on the basis that there is no third runway.

“The question I want answering is, if there is going to be no third runway, and no more in the south east of England, how does the nation cope with the fact that we’re going to receive an ever decreasing share of international passengers as all the other major international airports are expanding?”

He said that Heathrow’s major airlines, which include British Airways and Virgin Atlantic, would be unable to increase the number of international destinations because of the restrictions having only two runways brings.

“As a result, we’re becoming less competitive. Even if we continue to make operational improvements, it [Heathrow] will still be a world class but second tier airport I’m afraid.”

Sir Nigel said Ferrovial and GIC think the decision is “wrong”, adding: “The Spaniards and particularly the Singaporeans don’t understand why we’re not championing the UK. But I’m realistic enough to know it’s (a third runway) over for the foreseeable future.”

Sir Nigel’s comments were backed by BA, which reiterated that it would focus on growth at Madrid’s Barajas airport once its merger with Iberia is finalised.