Private equity group 3i was yesterday reported to have teamed up with one of the world's biggest pension schemes to table a bid for Gatwick Airport.

The group's infrastructure fund is said to be working with the Ontario Teachers' Pension Fund on a bid for the airport worth more than £1.5bn, according to a Sunday newspaper.

The consortium joins two others, one led by Virgin Atlantic and one by Canada's Vancouver Airports Authority, that have expressed an interest in the airport.

Gatwick's owner BAA will formally start the auction process this week when it issues the sales prospectus for the airport, with first-round bids expected soon after Christmas.

The move follows a damning report from the Competition Commission earlier this year in which it spoke of poor levels of service for airlines and passengers and proposed that BAA give up running two of its three London airports.

BAA, which is owned by Spanish firm Ferrovial, said the decision to sell Gatwick -used by 35 million passengers a year - was not taken lightly.

Gatwick is the busiest single-runway airport in the world, hosting 80 airlines and managing 262,000 air transport movements per year. It employs more than 25,000 people, around 2400 of whom work for BAA.

3i and the Ontario Teachers' Pension Fund are understood to have appointed NM Rothschild and the Australian banking group Macquarie to advise them on their bid.

The Canadian Pension Plan is also rumoured to be in talks to join the consortium.

Virgin Atlantic has already teamed up with Manchester Airports Group and is in financing talks with Goldman Sachs.

Low-cost airline easyJet is understood to be interested in signing a revenue-sharing agreement if the consortium is successful.

The Vancouver Airports Authority consortium includes Citigroup's infrastructure fund and the John Hancock Life Insurance Company.

Several Middle Eastern sovereign wealth funds are also thought to be considering a bid, including the Kuwait Investment Authority, the Abu Dhabi Investment Authority and Mubadala.

BAA has faced mounting criticism over the last few years as it has struggled to cope with rising passenger numbers and extra security procedures.

The Competition Commission's investigation into BAA's ownership of UK airports is still ongoing and it is due to publish its final report in the early part of next year.

It was not possible to contact anyone from 3i.