BAA, the owner of London's three leading airports, succumbed to regulatory pressure yesterday and put Gatwick up for sale.

The announcement immediately drew out a clutch of interested buyers, including Hochtief, the German building company, Manchester Airport Group and Sir Richard Branson, the founder of Virgin Atlantic, who has expressed interest in a consortium bid.

BAA pledged to continue to fight a Competition Commission ruling that it should sell a second London airport.

Steve Ridgway, chief executive of Virgin Atlantic, said he was glad that BAA had ended the uncertainty over Gatwick, adding that his airline would relish the opportunity to bid for the airport.

The interest from potential buyers will give some comfort to Ferrovial, BAA's parent, which will be under pressure to avoid a writedown on a sale of Gatwick. The Spanish company paid more than £10 billion for BAA two years ago and subsequently endured a refinancing crisis, the disastrous opening of Terminal 5 at Heathrow, tirades from politicians over Heathrow's failings and dismemberment by regulators.

BAA hopes to secure a bid well in excess of £2 billion, but some analysts expressed scepticism yesterday that it would get much more than £1.7 billion - the value attributed to Gatwick's assets by the Civil Aviation Authority in its regulatory review.

In its preliminary report, the Competition Commission said that BAA should sell three airports, including two in London. Gatwick is the second-largest of the three big London airports, but it offers little scope for expansion with only one runway - the world's busiest landing strip.

The Commission's initial report lambasted BAA for poor service, lack of ambition and complacency in its response to the needs of airline customers. Its final report is due early next year, but the group has taken the diplomatic course of choosing to sell Gatwick immediately while preparing the ground for an argument against selling Stansted.

Colin Matthews, BAA chief executive, said that the decision had not been taken lightly: “When the Competition Commission published its provisional findings, we said we would be realistic in our response, though we disagree with the Commission's report.” He said that BAA would continue to make the case for Stansted, arguing that a disposal would disrupt the process of securing planning approval for a second runway at Gatwick. A sale would delay delivery of the new runway, the BAA chief said.

Interest in Gatwick and its retail revenues is likely to be keen. Its two terminals are second in volume after Heathrow and its shopping areas would be attractive to an investor.

In its regulatory review, the Civil Aviation Authority forecast operating earnings for Gatwick of £184 million for the year to March 2009 and it valued its asset base at £1.8 billion. BAA will be expecting significantly higher proceeds from a sale to reflect Gatwick's profit-generating potential.

Airlines have argued for many years that BAA has been too slow making improvements to capacity, preferring to profit from rising rents in the overcrowded terminals.

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