BAA came a step closer to being broken up 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 in 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 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 include new measures to ensure BAA achieves greater service quality, particularly in reducing passenger queuing time.

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

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".

BAA, owned by a Spanish consortium, said it was already taking on hundreds more security staff to try to cut queues.