The airline industry, already bracing itself for war, is faced with a government warning that it may charge carriers for environmental damage.

Consequently, airline passengers may have to pay higher fares.

As compensation for the global warming caused by carbon emitted from aircraft, the Treasury estimates in a government paper issued this week that the aviation industry is facing a bill of £1.4bn. The biggest increase in fare is likely to be on long-haul flights, if the government goes ahead with a green tax on air travel.

The government paper measured, for example, the climate change costs of the eight tonnes of carbon emitted by a Boeing 737 flying 600 flights of the distance between London and Nice. Each passenger would be expected to pay about £4, based on an average of 135 seats sold on the aircraft.

The consultation paper, Aviation and the Environment, concluded: 'Full environmental costs are not currently factored into the prices paid by those who benefit from aviation. Hence there is a case for the government to intervene.'

The transport secretary has proposed allowing the number of air passengers to triple to 500 million by 2030. However, he is also reported as saying he intends forcing the aviation industry to pay for its pollution.

The industry says it already contributes £800m a year in air passenger duty, but the government has not been prepared to accept this as an environmental tax. The paper said forcing passengers to pay the environmental cost of their flights would reduce demand by 10 per cent. This suggests passenger numbers may grow to only 450 million by 2030 and may mean the south east would require only two new runways not three.

Ministers will now consult the industry on tax and regulatory measures, along with discussion on sites for new runways. Details: www.airconsult.gov.uk