Britain on Thursday said it would delay announcing where to expand London airport capacity to assess environmental impact, but critics said the move smacked of "gutless" political expediency.

The government said it would postpone the decision until at least mid-2016, amid strong lobbying by businesses for a third runway at Heathrow -- Europe's busiest airport -- and fierce opposition from some lawmakers and environmental groups.

"The government will undertake a package of further work and we anticipate that it will conclude over the summer," Prime Minister David Cameron's office said.

An earlier commission had recommended expanding Heathrow, but hundreds of homes would have to be demolished and the extra traffic could mean Britain fails to meet emissions targets.

Business groups have long called for Heathrow's extension, which they say would boost trade and help Britain keep up with rapidly expanding airports in the Middle East and Asia.

Heathrow handled some 73.4 million passengers in 2014 and connects to 185 destinations in 84 countries.

It lost its crown as the world's busiest airport for international passenger traffic to Dubai last year, while Turkey is planning massive airport capacity expansion in Istanbul.

"Businesses will see this as a gutless move by a government that promised a clear decision on a new runway by the end of the year," said John Longworth, director-general at the British Chambers of Commerce.

The government pointed to the need to address environmental concerns in justifying the delay.

"We will undertake more work on environmental impacts, including air quality, noise and carbon," said Secretary of State for Transport Patrick McLoughlin.

However, critics said the decision to delay was to avoid political embarrassment after a prominent member of Cameron's Conservative party threatened to resign should Heathrow be extended.

- 'Politics take precedent' -

Lawmaker Zac Goldsmith, who represents a constituency near Heathrow, is expected to run for London mayor next year, and his resignation as a member of parliament would result in a local election to replace him.

"I am absolutely delighted that, after much campaigning, the government has heard the arguments, seen sense and will judge the options against an environmental test," Goldsmith said.

He has in the past said he would not quit if the prime minister announced a "legitimate delaying exercise".

"To further delay a decision shows what we have repeatedly said -- that party politics takes precedence over what is best for the economy," said Willie Walsh, head of British Airways parent International Airlines Group.

When in opposition in 2009, Cameron opposed adding a third runway to Heathrow.

The other London airports considered for expansion were Gatwick, Luton, Southend, City and Stansted.

Environmental campaigners have set up camp in the countryside around Heathrow, and have stacked piles of wood to use for barricades.

Simon Clydesdale, aviation campaigner for Greenpeace, said there was no way the transport hub could be extended without breaking pollution limits.

"It's about time everyone accepted that no lobbying budget is big enough to change the laws of physics," he said.

London mayor Boris Johnson, who has advocated building a completely new airport in the Thames Estuary, said the difficulties of expanding Heathrow were becoming "very, very obvious".

"The real problem is it's so short term. It's so pathetically unambitious for a country like Britain."