Both Willie Walsh, IAG chief executive and his Virgin Atlantic counterpart Craig Kreeger have added their weight to a new option put forward by Surinder Arora, founder of the Arora hotel group, which the magnate claims will cut the price of the project by almost £7 billion.

Arora, whose hotel and property group is one of the largest landowners at Heathrow, said the airport’s current runway plan - estimated to cost about £16bn - would lead to an “unacceptable and untenable level of airline and passenger charges”.

His proposal has been submitted to the government as part of its consultation on the Heathrow runway that ministers gave the green light to in October last year.

Arora claims it could save £5.2bn by amending Heathrow’s plan for a third runway to the north-west of the airport, partly by reducing the site area by 20% as well as cutting the amount of demolition and groundwork required.

While he also believes the project could safe a further £1.5bn by avoiding construction work on the M25 motorway that runs close to Heathrow - bringing total savings to £6.7bn.

Arora has hired an advisory board including Sir Rod Eddington, the former BA and Cathay Pacific boss to oversee the project, the Sunday Times reports.

Walsh said Arora’s plans were a “welcome alternative to the airport’s own costly scheme” while Kreeger added that he welcomed the Indian-born businessman’s “fresh thinking”.

The DfT told the Financial Times that it will set out its next steps “in due course” after analysing all responses to its consultations and would consider the Arora scheme along with all other proposals.

“The government has made clear that it believes a new north-west runway at Heathrow is the best scheme to deliver the economic and connectivity benefits this country needs,” it added.

“This will not be expansion at any cost but the right scheme at the right price, and we expect industry to work together to drive down construction costs for the benefit of passengers.”