UPDATE 1-Britain delays airport decision due to post-Brexit fallout

(Adds minister’s statement, Heathrow statement, background)

LONDON, June 30 (Reuters) - Britain will not decide where to build a new runway at a London airport until at least October due to the political turmoil following Britons’ vote to leave the European Union, Transport Minister Patrick McLoughlin said on Thursday.

Heathrow, Britain and Europe’s busiest airport, has been campaigning for 25 years to build an extra runway and a decision had been expected this summer, after it was pushed back by the government from last year.

But after his side lost the vote on the country’s EU membership, Prime Minister David Cameron said he would resign by October, and a Conservative leadership contest has begun.

“Being realistic, given recent events, I cannot now foresee an announcement (on airport capacity in southeast England) until at least October,” McLoughlin told lawmakers.

Cameron’s government has been considering for four years where to build the runway, with Heathrow seen as the front-runner over Gatwick, Britain’s second busiest airport, after it was selected by the Davies independent commission in 2015.

However, his possible successor Theresa May opposes Heathrow expansion.

Another high-profile opponent of Heathrow expansion, former London mayor Boris Johnson, said on Thursday he would not be standing for the Conservative leadership.

Business leaders have repeatedly called on the government to build new runway capacity, as Heathrow, Europe’s busiest airport, is already full.

But past attempts to expand the airport, 15 miles west of London in a densely populated area, have been scuppered by local opposition over worries about increased noise and air pollution.

McLoughlin said a government analysis on air quality linked to expansion would be published soon, and said that despite the delays the runway could still be built by the 2030 deadline set by the Davies commission report.

The latest delay to Heathrow’s 18 billion pound ($24 billion) expansion plan was criticised by business groups.

The British Chambers of Commerce said the government was missing an opportunity to stimulate business confidence, while the City of London Corporation said competing on a world stage meant being able to build new trade links.

A quarter of the country’s exports move through Heathrow, Britain’s biggest port, but it has no extra capacity to add routes to new markets including China.

“If Britain wants to be confident, outward-looking and at the centre of the world’s economy then expanding Heathrow must be a key building block in the Government’s Brexit plan,” Heathrow chief executive John Holland-Kaye said in a statement.

Tesco chairman John Allan told BBC radio that a delay was “unhelpful” and lamented the fact that it was down to “reasons of internal party management” coming ahead of what was in the national interest.

Heathrow’s largest shareholder is Spanish infrastructure firm Ferrovial. Other partners include Qatar Holding, China Investment Corp and the Government of Singapore Investment Corp. (Additional reporting by Estelle Shirbon and Paul Sandle; Editing by Louise Ireland)