David Cameron has acknowledged the need for more airport capacity in the South East and said ministers would study the case for a new airport in the Thames estuary.
The Prime Minister insisted the UK must not give up its status as a major global hub for air travel, although he acknowledged the issue was "controversial". In a speech setting out his long-term "vision" for British infrastructure, he said the coalition's aviation strategy would include "an examination of the pros and cons" of a new Thames estuary airport.
Mr Cameron also announced moves to attract private investment into the UK's roads. He has ordered Whitehall experts to investigate a radical shake-up of ownership and funding to encourage investors to back desperately-needed upgrades to the ageing network.
He went on to say that the Government needed to be similarly "bold" about air transport too.
He said: "I'm not blind to the need to increase airport capacity, particularly in the South East. We are acting now to make the best use of existing capacity - Gatwick is emerging as a business airport for London, under a new owner competing with Heathrow.
"But we need to retain our status as a key global hub for air travel, not just a feeder route to bigger airports elsewhere, in Frankfurt, Amsterdam or Dubai. Yes, this will be controversial.
"We will need to take decisions for the long-term - and we will be bringing forward options in our aviation strategy which will include an examination of the pros and cons of a new airport in the Thames estuary."
Mr Cameron said the transport challenges facing the country were "clear".
"Demand for rail is higher than at any point since the Second World War. Our roads are congested, our key hub airport is full, by 2030 the distance travelled by road and rail in the UK is expected to increase by at least a third.
"Without world class transport we will not get growth, people won't invest here and regions in decline will be further left behind. Without better transport, we will continue to pollute, too."