Prime minister David Cameron is expected to announce a formal consultation on whether the project, estimated to cost £50bn, would be viable.
Pressure has mounted on the government to ease congestion on the UK's airport infrastructure but has faced fierce opposition on plans to expand the existing hubs such as Heathrow and Stansted.
Dubbed 'Boris Island', the Thames Estuary airport would be built on reclaimed land, similar to Hong Kong's Kowloon Island airport, at the Isle of Grain off the Kent coastline. It will consist of four runways and would be connected to high speed rail links between central London, Kent and Essex. Supporters say it would encourage the use of eco-friendly water taxis and public transport to travel to and from the airport, plus alleviate traffic congestion on the M25.
London Mayor Boris Johnson told the Evening Standard he believes the government is "increasingly interested" in pursuing the project and emphasised the need to compete with France and Germany in offering long-haul flights to China and the Far East.
Mick Rix, the GMB union's civil aviation industry national officer, dismissed the plans and called on politicians to reopen discussions on the third runway for Heathrow.
An endorsement for the new airport was given in the Chancellor's Autumn statement, however the Treasury has ruled out any future development of a third runway at Heathrow.
A Department of Transport spokesman said no decision had been made on the Thames Estuary site and reiterated the government's view that all options were open "with the exception of a third runway at Heathrow".
In November last year, the deputy chairman of TfL Daniel Moylan published a report which warned that the UK faced "economic paralysis" and the loss of tens of thousands being exported to Frankfurt, Paris, Amsterdam and Madrid without a new airline hub.
Demand for London's airports is set to grow from 140m passengers per year in 2010 to 400m by 2050, according to TfL. The Civil Aviation Authority(CAA) chief executive Andrew Haines said last week: "As we haven't built a single runway in the south east of England capable of handling Boeing 747s and Airbus A380s for over 70 years, the difficulty of increasing capacity is obvious...this is not a policy for five year, but one for 30 years."