SCOTLAND is losing out on an estimated £890 million in trade each year as a result of capacity constraints at Heathrow, according to new analysis.

Research by independent consultants at Frontier Economics concludes that flying via a hub airport abroad rather than via Heathrow generates less trade for the British economy.

It finds that a third runway at the London base would bring millions more in trade to Edinburgh, Aberdeen and Glasgow and £1.7 billion for the UK as a whole by enabling passengers who are currently forced to travel via an internationally-located hub to fly via an expanded Heathrow instead.

The report, which was commissioned by Heathrow, estimated that Edinburgh Airport - owned by the same parent company at Gatwick Airport, which is also vying for expansion - would be the biggest beneficiary in Scotland, with a £360m annual trade boost.

Aberdeen Airport would gain an estimated £270m and Glasgow Airport an estimated £260m.

Lack of capacity at Heathrow - Europe's busiest airport - means UK domestic passengers increasingly have to reach long-haul destinations via other European or Gulf hubs.

In a keynote speech at the International Festival for Business, Heathrow chief executive John Holland-Kaye, said the findings underpinned the case for a third runway.

He said: “Heathrow is the right choice for a long-term plan to back every corner of the UK. An expanded Heathrow would connect more business in Scotland to more customers and suppliers across the globe, more frequently and in just one stop.

“To rebalance and strengthen the British economy, the UK needs a domestic hub airport that can compete with our unconstrained hub rivals abroad, and that’s something only Heathrow can deliver.”

A report by the Airports Commission last year recommended a third runway at Heathrow as the best way to deal with the growing demand for air travel, against a second runway at Gatwick or a runway extension at Heathrow.

The UK Government has been accused of "dithering" over a final decision on the controversial issue after commissioning a series of environmental and noise impact studies.

A decision was previously promised by the end of 2015, but was pushed back to summer 2016.

MPs have urged the Government to decide by the end of July.