Mayor of London, Boris Johnson has turned down expansion plans for London City Airport on the grounds of noise.
The airport will now not be able to bring in the larger planes it wanted to serve new destinations.
The airport added that its City Airport Development Programme (CADP) could have delivered an additional £750million per year to the UK economy and 2,000 new jobs in Newham and the east of London (500 of these during construction).
The airport's chief executive officer Declan Collier said: "It is ironic that the Mayor of London, whose platform has always been one of advantage for business in London, is denying the capital the business opportunity presented by growth at London City Airport.
"It is doubly ironic that this decision was taken on LCY’s busiest-ever day, when more than 16,500 passengers passed through the terminal. Demand for the connectivity the airport provides is growing, driven by the success of London as a global business centre, and to service this demand, the airport needs to grow."
London City Airport will make a decision on its response strategy shortly.
A Mayor of London spokesman said: "The mayor has long argued that Heathrow Airport cannot be expanded due to the increased noise it would lead to in west London and he is not willing to expose east London to additional noise either.
"The Mayor continues to believe that a new hub airport to the east of London is the only long-term option that will provide enough aviation capacity – without detriment to the health and well-being of hundreds of thousands of people in London and the southeast."
Newham Council agreed the plans to grow the airport in February, but its decision was always dependant on approval from the Mayor of London.
John Stewart, chair of HACAN East, which campaigned against the expansion plans, has welcomed the decision.
He said: “The airport is paying the price for being so cavalier about noise. Quite simply, Boris did not believe its claims that it was dealing adequately with noise. We salute his decision”.