LONDON (Reuters) - The British government has decided to allow Heathrow airport to build a new runway, Sky News reported on Tuesday.

Heathrow, Europe's busiest airport, is battling with its smaller rival Gatwick for the right to expand, after successive governments failed to make a decision on a new runway due to environmental and political opposition.

The government is due to announce the decision shortly.

"Sky sources say the government has approved plans for a third runway at Heathrow," an article on the news channel's website said.

Earlier the BBC reported Heathrow had been chosen, but did not specify which of the two possible options the government had backed -- a new runway or the extension of one of its existing ones.

(Reporting by Kylie MacLellan and William James, editing by Estelle Shirbon)