BAA came a step closer to being broken up today after airlines won their battle for a full investigation into the dominant airports operator.

The Office of Fair Trading (OFT) referred the Gatwick owner to the Competition Commission after most industry bodies it consulted during a three month inquiry supported such a move.

It said it stuck by its provisional view in December that the current market structure did not "deliver best value for air travellers in the UK".

The Competition Commission's inquiry will take up to two years and could recommend the break-up of the operator, which also owns airports at Southampton, Glasgow, Edinburgh and Aberdeen, as well as Heathrow and Stansted.

The Commission will look at BAA on a second front after today receiving proposals from the Civil Aviation Authority (CAA) about how much BAA can charge airlines at Heathrow and Gatwick between 2008 and 2013.

The proposals are in line with its earlier guidance but include the addition of new measures to ensure BAA achieves greater service quality, particularly in reducing passenger queuing time for security.

It wants greater financial penalties imposed on BAA where passenger service falls short, while the operator could secure bonuses if passenger service across each airport is significantly above agreed standards.

CAA group director Dr Harry Bush said: "The CAA considers that it has struck an appropriate balance in challenging BAA to continue to improve its operating efficiency and service quality, and providing adequate rewards for timely investment at Heathrow and Gatwick.

"It now awaits the Competition Commission's analysis and advice on these important issues."

While airlines welcomed the OFT referral, low-cost airline easyJet said the CAA's proposals represented a bad deal for travellers.

It is unhappy that BAA could be be allowed to recover inflation plus up to two per cent every year at Gatwick over the course of the next five years - "without providing any discernible benefits to air travellers that they shouldn't be providing already".

Andrew Barker, easyJet planning director, said: "Today's announcement that the OFT has referred BAA to the Competition Commission clearly demonstrates that there is a problem with the running of our major airports. So, we are disappointed that the CAA is recommending a deal that is so obviously pro-BAA."

BAA, which was taken over by a Spanish-owned consortium last year, said it was already working through plans to take on hundreds more security staff and install more security lanes to try to cut queues.