Birmingham International Airport's expansion plans could be in jeopardy, it was claimed last night, following the sale of its Coventry rival to a US-led consortium intent on pressing ahead with controversial development proposals.

CAFCO (Coventry), which announced the deal yesterday but refused to reveal the fee, said the site was the first in a network of European regional airports it was looking to buy.

The consortium, which had been in discussions to buy Coventry Airport for 12 months, confirmed it would progress plans for a two million passenger a year terminal, which are the subject of a public inquiry starting on Tuesday.

It also sugg e s t e d i t would seek to increase freight and private corporate traffic, angering local residents opposed to the airport's expansion.

BIA will be the main objector to Coventry's expansion, citing fears over airspace constraints.

The Birmingham Post understands BIA was prepared to buy Coventry, but at a lower price than the lease was eventually sold for, in order to keep the rival passenger operation at a limited level.

Its financial backers are known to want this safeguard before financing billion-pound plans for an extension to the existing runway and the construction of a second.

Peter Rothwell, chief executive of outgoing owners TUI - which bought Coventry Airport two years ago in order to launch the Thomsonfly

no-frills airline - said his company's relationship with BIA had been "difficult" and he was disappointed it was objecting at the public inquiry.

He claimed it was a "logical conclusion" that BIA's expansion plans would be compromised by the sale of Coventry to a rival operator.

"Compare the difference in disruption that Coventry Airport, with a good runway already in place, will cause by rising to two million passengers a year with Birmingham ripping up half the Midlands to expand.

"Some of the demand that

Birmingham is seeking to meet can far more easily be met here."

Thomsonfly remains one of the biggest operators at BIA but Mr Rothwell said the company had "no long-term commitment to Birmingham" and routes were based on market demand and the charges airports levied on the airline.

He added: "Of all the airports we deal with, Birmingham is one of the least attractive propositions for us."

Chuck Stipancic, chief operating officer of Aviation Facilities Company, the Virginian aviation company which leads the consortium, said the fee paid for the airport reflected the remaining uncertainty surrounding the public inquiry.

He added TUI, which is thought to have paid £7 million two years ago, had

made a profit on the deal. Mr Stipancic said a two million passengers a year cap agreed with planning authority Warwick District Council still allowed for future growth.

"There is a long way to go to get to two million but when we do we will be looking at expanding cargo traffic and corporate flights, which is very limited in this area."

He said they would also use the airport as an "economic driver" for the surrounding area, including new office parks and other developments.

BIA's expansion plans, which aim to meet a predicted tripling in passenger demand over the next 25 years, would cost about £1.5 billion. Following t h e extension of the current runway by 2012, it wants to build a second runway and third terminal around 2020.

Richard Heard, BIA managing director, said the unique proximity of Coventry Airport to BIA - just 11 miles - and the conflicting alignments of the runways, caused him "serious concerns that unnecessary development of passenger services at Coventry would undermine BIA's ability to fulfil the role set out in the Government's Aviation White Paper in 2003".

He added: "Thomsonfly are, and have been, a major and valued business partner at BIA for many years.

"With the strong demand for air travel in the Midlands, the great access links and facilities that we provide at BIA, and the strength of the Thomsonfly brand, we see no reason why that successful partnership won't continue in the future."