It has suggested to transport ministers that a new runway be built south of the existing two main runways, which it hopes would lead to less opposition than plans for a runway north of the present airport.
The new runway would be about 2,500 metres shorter than the existing two, but sufficient to take all short-haul jets. It would be close to the southern runway, 27L, which would limit the extra new capacity but would still provide enough to meet demand well into the next decade.
It would also be close to Terminal 4, which would become a European rather than intercontinental terminal, and would involve the demolition of a cargo terminal and some properties at Stanwell in Surrey.
However, the damage would be much less than that caused by the northern proposal, although BA would have to try to get the required separation of 900 metres between runways reduced in order to limit damage.
The plan north of the runway would involve the closure of the A4, the demolition of several hotels and up to 4,000 homes. The billions required in compensation make it impractical.
The new plan would have to obtain the agreement of BAA plc, which owns and operates the airport. It is, in part, an attempt to pre-empt the findings of the Runway capacity in the South- East committee (Rucatse), which has been considering for two years where extra runway capacity should be built.
The report, due to be published by the Department of Transport at the end of the month, will not suggest any preference between the four London airports - Heathrow, Gatwick, Stansted and Luton. Instead it will present the advantages and disadvantages of each site.
It will also devote an appendix to Marinair Port, the suggested development in the Thames estuary which would be a fifth London airport, linked to Tilbury by train. That scheme is welcomed by environmentalists but is viewed with suspicion within the aviation industry because of the enormous cost - pounds 4- pounds 5bn - and its remoteness.
The Rucatse report is based on the premise that new capacity will not be needed until 2005, but the airlines are worried that this will be too late. One senior manager told the Independent: 'It is no good the Government sitting on this report. I think new capacity will be needed before 2005 . . .'
In fact, BAA, which owns all the airports bar Luton, is not anxious to embark on a new runway development because it has underused capacity at Stansted, and has large capital spending requirements because it will need to build new terminals both there and at Heathrow.
Neither BAA nor BA would comment on the plans.