The debate over a new London airport was unexpectedly re-opened as the Chancellor acknowledged that the Government "must confront" the lack of capacity in the South-east of England.
Saying the UK should not "cut ourselves off from the fastest growing cities in the world", he said the Transport Secretary, Justine Greening, would set out Government thinking this summer.
Heathrow, the world's busiest airport in terms of international passengers, is almost at full capacity – but ministers have ruled out building a third runway because of environmental and residents' concerns. David Cameron has shown growing interest in proposals for an airport in the River Thames estuary, backed by the London Mayor, Boris Johnson.
George Osborne also signalled that the planning system, whose traditional purpose has been to control development in the countryside, was about to be transformed into a tool for encouraging economic growth.
He disclosed that the highly-controversial National Planning Policy Framework would be published by the Communities Secretary, Eric Pickles, next Tuesday, and he made it clear what it would contain – in his own words, "new growth-friendly planning rules".
He confirmed that the much-criticised "presumption in favour of sustainable development" would remain, and he indicated that ordinary countryside would lose the special status it currently has, saying that the new system would protect "our most precious environments".
He made no reference to the review of the Habitats Regulations which prevent large-scale development on wildlife sites of international importance. But it emerged last night that the review will be published this morning.