Shoreham Airport, the UK's oldest working airfield, is set to be transformed and could play a vital role in Britain's aviation future.

A government report has suggested the airport, rarely used for commercial flights, could take up to 500,000 passengers a year.

Airport manager John Haffenden believes the airport could only take half that number.

However, it is recognised major changes will have to be made to equip the airport to help meet the demands on Britain's £10.2 billion-a-year aviation industry.

The number of air passengers in the UK is expected to grow by five per cent a year and the air freight market by seven per cent a year over the next two decades.

Work is about to start on an ambitious plan aimed at renovating the airport's rundown buildings and overhauling the local transport infrastructure.

Ideas to revitalise the airport include a park-and-ride scheme linking Shoreham and Brighton, a new railway station, and a new link road from the A27.

The runway could be increased from 1,000m to 1,500m, a derelict hangar could be refurbished and new commercial buildings provided to attract more firms to the airport.

Planning consultants Drivers Jonas have won a contract to create the regeneration plan in liaison with the airport's joint owners, Brighton and Hove City Council and Worthing Borough Council.

Opposition to any major expansion plans is expected to come from residents in nearby Shoreham and Lancing, as well as environmental groups.

They would be unwilling to put up with substantial increases in noise and air pollution caused by a huge swell in air traffic.

The airport has been used regularly for flying since 1910. The first air cargo flight in Britain was from Shoreham to Hove on July 4, 1911.

Mr Haffenden estimated the costs of regenerating the airport at between £10 million and £20 million, depending on the consultants' recommendations.

Their strategy will be drawn up by October, following intensive consultation with residents and landowners.

Councillors have urged that environmental concerns be given a strong priority.

Councillor Neil Parkin, leader of Adur District Council, said: "Many residents live around the airport and we must make sure their quality of life is safeguarded."

Environmental campaigners believe the airport site is already developed enough.

Keith Taylor, convenor of the Green Party group on Brighton and Hove City Council, said: "We are all for positive regeneration but it should not be at the expense of the local area and residents' quality of life.

"To think of hundreds of thousands of extra passengers a year is just ludicrous."

Any new development would likely to be at the municipal hangar and a plot of land beside the terminal, which has long been earmarked for a new departure lounge.

Mike Middleton, chairman of the Shoreham Airport Committee, said: "The airport needs to cater for larger aircraft. That is where the money is.

"We have got as far as we can with the airport at its current capabilities. Now hopefully the consultants will help us take major steps forward over the next five years."