Heathrow has been warned that it cannot afford a third runway without loading the business with billions of pounds more debt.

In a damning new report, the ratings agency S&P Global said the planned expansion will potentially imperil the airport by significantly increasing its borrowings, which are are already as high as nearly £20bn.

As well as increasing debts, S&P said the project would also lead to higher passenger charges at Heathrow, which are already among the highest in Europe.

According to S&P, this “could lead to a weakening of Heathrow’s competitive position relative to other European hubs” – raising fresh concerns over the airport’s status as a global transport hub.

Heathrow has insisted that the planned expansion will not need any financial support from the taxpayer, although S&P claims it will not be able to afford a third runway without a significant cash injection from its shareholders.

The airport’s backers are largely made up of overseas investors, led by French private equity giant Ardian, the Qatar Investment Authority and Saudi Arabia’s Public Investment Fund.

S&P said: “Notwithstanding Heathrow’s strong regulatory environment and superior competitive position, we believe that our issue ratings on Heathrow’s debt have limited headroom for significant additional leverage.

“In our view, the new runway would be difficult to finance without strong equity backing.”

Concerns over how Heathrow will pay for a third runway have emerged just months after Chancellor Rachel Reeves backed the £20bn project, as she stepped up efforts to boost economic growth.

Heathrow is set to submit plans for the expansion later this year, with chief executive Thomas Woldbye claiming that the third runway could be in use by 2035.

Plans could see the airport’s capacity increase from 80m passengers a year to 140m in an expansion costing between £20bn and £25bn, according to S&P.

Mr Woldbye has said that a third runway would lead to lower air fares for passengers because it would remove flight capacity limits that are responsible for inflating prices.

Meanwhile, the airport’s latest annual reports show that Heathrow has just over £19bn worth of debt across the business, which led to more than £600m in finance costs last year alone.

However, these did not prevent the airport from posting profits of £917m from total revenues of £3.6bn.

A Heathrow spokesman said: “Expanding Heathrow will be entirely privately funded, and as such must be financeable. Policy changes, including adjustments to the regulatory regime for a third runway, will be key to delivering the project successfully.”

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