A long-awaited report into airport capacity has recommended that a new runway should be built at Heathrow rather than Gatwick.

After three years of investigation, the Airports Commission said Heathrow was best placed to provide "urgently required" capacity.

It chose a new, full-length runway at Heathrow rather than expanding one of the airport's current runways or building a new one at Gatwick.

The commission also recommended a "comprehensive" package of measures to make Heathrow 's expansion more acceptable to the local community. This includes a ban on night flights from 11.30pm to 6am, legally binding limits on noise, a new levy to fund insulation for homes, schools and other community facilities around Heathrow, and an independent noise authority.

Commission chairman Sir Howard Davies said the conclusions were "clear and unanimous". He warned that London's airports were showing signs of "strain" and the entire system would be full by 2040 without action.

While campaign groups have expressed relief, for now, Gatwick's chief executive Stewart Wingate said the airport was "still very much in the race".

He said: "The Commission’s report makes clear that expansion at Gatwick is deliverable. 

“It is for the Commission to make a recommendation but it is of course for the Government to decide. So we now enter the most important stage of the process.

“We are confident that when the Government makes that decision they will choose Gatwick as the only deliverable option."

Mr Wingate highlighted "very significant environmental challenges at Heathrow such as air quality and noise impact" while drawing attention to Gatwick's "economic benefits" and reduced impact.

He added: "It is quicker simpler and quieter. Above all - after decades of delay - it can actually happen.”

Sally Pavey, chairwoman of Communities Against Gatwick Noise and Emissions (CAGNE) expressed "total relief" at the news but said: "We will watch Gatwick and continue to fight the changes to flight paths and any new flight paths it may try to implement."

She added: "We feel sadness for those communities around Heathrow."

Another key opposition group has been the Gatwick Area Conservation Campaign (GACC).

It has said it will continue to make the case against a new Gatwick runway.

Chairman Brendon Sewill said: "If there were a political decision in favour of Gatwick it would be an environmental disaster for the South East - more noise, more pollution, more climate change damage, new flight paths, large scale inward migration, multiple traffic jams and a worsening of the north/south divide."

The Government will now consider the recommendations, but the commission said a firm decision was needed soon, as bringing a new runway into operation would take at least a decade.

No new full-length runway has been built in south-east England since the 1940s, while other countries have kept pace with the growing demands of an expanding aviation industry, said the commission. Its 242 page report also recommended that a fourth runway at Heathrow should be "firmly ruled out".

The cost of building a new runway is estimated to be around £17.6 billion, said the commission, with billions more in transport costs.

The commission said a new runway would generate up to £147 billion in economic output over 60 years and create more than 70,000 jobs by 2050.

Regular daily services to around 40 new destinations would be added, including 10-12 new long-haul flights.

Gatwick had presented a "plausible" case for expansion and was well placed to cater for growth in European leisure flying, but was unlikely to provide capacity which was urgently required - long-haul destinations on new markets, said the report.

"Heathrow can provide that capacity most easily and quickly. The benefits are significantly greater, for business passengers, freight operators and the broader economy," said Sir Howard.

The commission had ruled out a new airport in the Thames Estuary, favoured by London mayor Boris Johnson, as "unfeasibly expensive and hugely disruptive for many businesses and communities."

A new runway at Heathrow would provide the necessary capacity until 2040 at least, said Sir Howard.

"Beyond that the position is uncertain and will be strongly dependent on the international policy approach to climate change."

A ban on night flights would affect 16 which currently land at Heathrow between 4.30 and 6am. This would only be possible with expansion, said the commission.

A "noise envelope" would be agreed, legally binding Heathrow to stay within limits. This could include stipulating no overall increase above current levels.

The commission also recommended that Heathrow should compensate residents who would lose their homes - estimated at 783 - at full market value plus 25% and reasonable costs.

The airport should also be held to its commitment to spend more than £1 billion on community compensation, the report said. It also called for an aviation noise authority to be set up, with a statutory right to be consulted on flight paths.

New investments in railways should be made and a congestion charge for cars arriving at Heathrow should be considered, it was urged.

John Holland-Kaye, chief executive of Heathrow Airport said: "This debate has never been about a runway, it's been about the future we want for Britain.

"Expanding Heathrow will keep Britain as one of the world's great trading nations, right at the heart of the global economy.

"Our new plans have been designed around the needs of local communities and will meet carbon, air quality and noise targets, and provides the greatest benefit to the UK's connectivity and its long term economic growth.

"We will create the world's best connected, most efficient and most environmentally responsible hub airport at the heart of an integrated transport system. The Commission has backed a positive and ambitious vision for Britain. We will now work with Government to deliver it."