Controversial plans for a second runway at Gatwick Airport have effectively been scrapped for ever.

Transport Secretary Alistair Darling can only rule out development for 30 years, as that is the longest period covered by his White Paper, but expansion is unlikely to ever go ahead.

This is because other airports will be developed to take the strain of predicted rises in passenger numbers.

Demand for air travel is expected to rise from 180 million passengers a year to 500 million.

The Gatwick decision is a huge victory for campaigners who have fought the proposal for decades.

But Sussex businesses fear the decision could turn international companies away from the county, harming the economy and hitting jobs.

Mr Darling made the announcement to spare people living nearby from "blight and anxiety".

Local campaigners had been hoping a second runway would be ruled out until 2019, when an agreement banning construction work expires.

Mr Darling, publishing the findings of a study of air travel in the South-East, went much further and scrapped any expansion plans altogether yesterday.

Mark Froud, chief executive of Sussex Enterprise, which develops local businesses, said: "We are annoyed a decision made in 1979 is essentially affecting what is going to happen at Gatwick for the next 50 years.

"We think it is stupid because the route network at Gatwick has more destinations than any other airport in the UK and now that will either move to Stansted or, we think more likely, a Continental location.

"For Sussex it will mean little change in the short term up to when we get close to current runway capacity. But after that, international companies are going to start thinking whether they want to be based around Gatwick.

"It will come back to haunt Sussex in ten years and business here will have to live with it."

Brendon Sewill, of the Gatwick Area Conservation Campaign, said: "It is very important Gatwick is not going to stagnate as it is due to expand its passenger numbers by 50 per cent.

"We will be keeping an eye on it and watching carefully because there will be huge protests at Heathrow and Stansted, which we sympathise with but we need to make sure the proposals don't come back to Gatwick."

Amanda Brace, Friends of the Earth regional campaign co-ordinator for the South-East, said: "We are pleased there is no runway proposed at Gatwick but we are not happy about the report overall because it is bad for the South-East.

"We are worried about Shoreham because the airport has been identified as being able to take a capacity of up to half a million passengers a year.

"There have been plans in the past and some people would like to see it take more commercial passengers and offer short-haul flights to Europe.

"It would cause noise and traffic impact and it is not too far away from the proposed national park."

Mr Darling's decision hinged on the agreement signed by the British Airports Authority and West Sussex County Council in 1979.

He confirmed the Government considered building one or even two extra runways at the airport but he said he had decided not to try to challenge the 1979 agreement.

Mid Sussex MP Nicholas Soames said: "I have been involved with this for almost 20 years and I always thought the Government would not overturn the agreement but Gatwick remains a vital transport asset.

"It is a huge decision and I think the Government has made the right one."

The Government's other options include new runways at Stansted and Heathrow or building a new airport in north Kent.

A firm recommendation will be published next year.