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BAA will be forced to sell London airports Gatwick and Stansted, as well as Edinburgh, as the regulator attempts to improve competition in the aviation industry.

The Competition Commission (CC) said BAA, which is itself owned by Spanish company Ferrovial, must sell three of its seven airports to introduce competition into the south-east and Scotland.

Gatwick is already up for sale after the regulator warned in August that it may require separate ownership of the London airports.

The airports were originally allowed to be owned by one company as it was thought a single operator would find it easier to raise the huge investment needed to maintain the facilities.

However, the CC concluded customers were not benefiting from the lack of competition.

Christopher Clarke, chairman of the BAA airports enquiry for the CC, said: "Under the common ownership of BAA, there is no competition.

"Under separate ownership, the airport operators, including BAA, will have a much greater incentive to be far more responsive to their customers, both airlines and passengers."

Colin Matthews, BAA chief executive, said: "As we said when the Competition Commission published its provisional findings in August, we do not believe that it has set out compelling evidence to support its view that selling Stansted as well as Gatwick will increase competition and we remain concerned that its proposed remedies may actually delay the introduction of new runway capacity."

The CC admitted that capacity constraints in the south-east will stifle competition but said customers can still expect benefits from different approaches to airport management.