LONDON City Airport is to be sold to a US consortium including insurance AIG for an undisclosed amount.

The airport, in the Royal Docks, about 10 miles east of central London, will play a key role in the 2012 Olympics because of its proximity to the Games site in Stratford.

The airport today announced that the sale process had attracted significant world wide interest since May.

Although the sale sum has not been announced, reports suggested it could be £750 million.

Current owner, Irishman Dermot Desmond, bought the airport for just £23.5 million in 1995.

"It is understood it reflects confidence in the Airport's development potential as exemplified in the Master Plan published earlier this year," a statement from London City Airport said.

"London City Airport understands that its new owners plan to work closely with the existing Airport management team to maximise the development and future value of the airport.

"This transaction remains subject to EU merger clearance and is expected to close in November 2006."