Industry News

The CBI is facing a stern test of its authority as the main voice of business after its supportive stance on Heathrow's expansion was undermined by a band of prominent executives.

Ministers have claimed for months that the scheme has the solid support of business groups such as the British Chambers of Commerce, CBI and London First.

But cracks in that unified front have appeared after a letter calling for a halt to the third runway - in favour of more high-speed rail - was signed by 13 business leaders. They include James Murdoch, head of News Corporation (NASDAQ: NWS - news) in Europe and Asia, Justin King, chief executive of Sainsbury (LSE: SBRY.L - news) 's and Ian Cheshire, chief executive of Kingfisher (LSE: KGF.L - news) .

The emergence of the split will be a serious test for Richard Lambert, head of the CBI, not least because he has sought to burnish the group's green credentials.

One business lobbyist told the Financial Times on Monday that support among CBI members for Heathrow's expansion was not rock solid outside the south-east. The letter was also signed by two of Tony Blair's close friends, Charles Dunstone, founder of Carphone Warehouse (LSE: CPW.L - news) , and Russell Chambers, a senior banker at Credit Suisse. Mr Blair has maintained a studied silence about the controversial third runway in recent months.

Other signatories include business figures with links to the Conservative party, which has vowed to cancel Heathrow's expansion if it forms the next government.

Colin Matthews, chief executive of Spanish-owned BAA, which controls most of Britain's airports, will defend the scheme on Tuesday at the airport group's presentation of its first-quarter results.

Mr Matthews is likely to point to a much larger list of 100 companies that have backed the proposals, ranging from AstraZeneca (LSE: AZN.L - news) to Rio Tinto (LSE: RIO.L - news) and Thomson Reuters (TRI.TO - news) .

BAA claimed on Monday a "significant proportion of the UK business community" stood behind it.

Environmentalists have questioned claims by Geoff Hoon, transport secretary, that the airport will meet environmental standards.

Ministers say Heathrow is at full capacity and desperately needs the runway. One Whitehall source said on Monday it was hypocritical of the business leaders to criticise the project. "My question would be, how often have they been on a plane in the last year?" he said.

But the 13 executives behind the Heathrow letter argued that "the benefits to business are unclear and unproven" and there could be a damaging impact on the environment.

They urged ministers to abandon the expansion and instead concentrate on high-speed rail services - a policy espoused by the Conservatives. One signatory, Jon Moulton of Alchemy, has given the Tories £125,000 and £150,000 to Liam Fox, shadow defence secretary, according to the Electoral Commission database. Another, Howard Leigh, is a director of Cavendish Corporate Finance, which has given £67,220 to the party.

The group also includes Lord Young of Graffham, a former Tory minister, while Mr Dunstone is on the Conservatives' "Creative Industries Review". But one signatory said it was nonsense to suggest that the group had a Tory tinge: "This is nothing to do with party politics, you won't find a broader church."

David Levin, head of United Business Media, Ian Cheshire, chief executive of Kingfisher and Mr King of Sainsbury all keep their political views to themselves - although Mr King is advising Tory mayor Boris Johnson on the Olympic Games.

Mr Chambers, who orchestrated the letter, is known as "Tony Blair's favourite banker" and has holidayed with the former premier.

The CBI insisted on Monday that its support for the expansion reflected the views of "the majority" of the business world.