PLANS to devolve Air Passenger Duty (APD) to Holyrood provoked a furious backlash south of the Border over fears that scrapping the tax will lead to a stampede of passengers crossing the border for cheaper flights.

The Scottish Government favours halving and eventually axing the tax, which is worth around £2.9 billion in the UK annually, in a bid to increase travel from the country's airports and boost the economy.

Around £200 million of the tax is raised in Scotland. It typically adds £52 to the cost of tickets for a family of four on short-haul flights and £276 on long-haul.

Although most Smith Commission representatives favoured devolution in the area, shadow chancellor Ed Balls was among those to voice concerns. Willie Walsh, of British Airways' parent company IAG, said people would be "rushing across the border" as a zero APD rate would make it £276 cheaper for a family of four to fly to the US.

Newcastle Airport said it feared 1,000 jobs and hundreds of millions of pounds would be lost to the economy in the area if duty was removed over the Border.

However, the move was backed by Scotland's largest airports. The tax, which has already been axed in many European countries, acts as a barrier to tourism and discourages airlines from adding new routes according to industry chiefs.

Gordon Dewar, Edinburgh Airport chief executive, said: "We strongly believe that there is a real case to see it devolved as soon as possible so that Scotland can capitalise fully on the benefits of this fantastic year where we have been in the global spotlight. Airline planners are finalising 2015 now and we run the risk of losing that momentum as those people who wish to visit us are deterred by the highest aviation taxes in the world."

Highlands and Islands Airports (HIAL) said the tax was "choking" the recovery of the airline industry and acted as a barrier to business and tourism. Glasgow Chamber of Commerce said it should be slashed or scrapped completely.

Amanda McMillan, managing director of Glasgow Airport, said: "APD is a damaging, regressive tax which, in addition to dissuading airlines from adding new routes, makes it extremely challenging to maintain existing services. Having full control of APD will play a major role in strengthening Scotland's connectivity and provide yet a further boost to our burgeoning tourism industry."

Immediately after the announcement that APD was part of the package of new powers proposed for Holyrood, Westminster faced calls to react to the fact that Scottish airports may be handed a big advantage.

First Minister Nicola Sturgeon said the Scottish Government's position over the tax had not changed.

Newcastle Airport said it was "extremely concerned" over the development. Chief executive, David Laws, said: "Our submission [to the Smith Commission] predicts 1,000 fewer jobs across the North East by 2025, significant impact on passenger numbers, £400m in Gross Value Added lost between 2015 and 2025, and additional journey time costs of £265M between 2015 and 2025.

"We are now seeking a signal from the Chancellor in next week's Autumn Statement that the Government is going to do something to address any future distortions."

Bristol Airport has also raised fears that it would be damaged if the Welsh Assembly devolved APD. It would hand a significant advantage to Cardiff, lying across the Severn Estuary and just 65 miles away.

In a letter to George Osborne, Mr Balls said: "English regional airports cannot be faced with continuing uncertainty and risk through not knowing whether they will be significantly disadvantaged should a future Scottish Government introduce changes to APD."