The Tories appear to be laying the groundwork to drop the expansion bid at Heathrow airport after judges this morning grounded plans for a third runway.
Transport Secretary Grant Shapps said the government would consider the judgement carefully before setting out the next steps.
But the statement distanced the government from the infrastructure project, in what will be seen by many as preparing to ditch the project.
Mr Shapps said: "Airport expansion is a core part of boosting our global connectivity and levelling up across the UK and it is critical that vital infrastructure projects, including airport expansion, drive the whole UK economy.
“We have always been clear that Heathrow expansion is a private sector project which must meet strict criteria on air quality, noise and climate change, as well as being privately financed, affordable, and delivered in the best interest of consumers.
“The Court of Appeal ruled today that the Airports National Policy Statement designated by the previous Government did not take account of the Paris Agreement, non-CO2 emissions and emissions post 2050, and therefore has no legal effect unless and until the Government carries out a review.
“This Government has taken the decision not to appeal today’s judgment. We take seriously our commitments on the environment, clean air and reducing carbon emissions.
"We will carefully consider this complex judgment and set out our next steps in due course.”
Business and union leaders voiced disappointment at the Court of Appeal's Heathrow ruling, warning of the impact on companies across the country.
Dr Adam Marshall, director general of the British Chambers of Commerce said business communities across the UK would be "bitterly disappointed" that plans for a world-leading hub airport were now at risk.
He said: "Without expansion, firms risk losing crucial regional connectivity and access to key markets across the world.
"The benefits of a third runway would extend far beyond south-east England. Hundreds of UK companies are already invested in the supply chain for expansion, and tens of thousands of additional jobs will be created if the project goes ahead.
"Heathrow and the wider aviation sector have set ambitious emissions targets, and like every industry, must continue to become greener.
"Britain's future depends on investment in a modern, integrated, low-carbon transport infrastructure that keeps trade flowing while minimising environmental impacts.
"There has never been a more important time to demonstrate that Britain is open for business.
"The Government must back Heathrow expansion unequivocally and take all necessary steps to finally move the project forward."
Josh Hardie, the CBI's deputy director general, said: "This decision raises a fair question of how to balance reaching the net-zero target without stifling the UK's global ambitions.
"All major projects must be consistent with net-zero and it's clear that the Government and aviation industry need to work closely to agree a robust decarbonisation plan.
"But this decision risks holding back the very investment in innovation needed to achieve that, and the ambitions of many businesses eager to benefit from greater international connectivity.
"It is vital that the Government and Heathrow work closely together to remedy the fair concerns raised by the judgment and keep this project on track. Opportunities for future trade will not wait."
Brian Strutton, general secretary of the British Airline Pilots' Association said: "We understand the challenge that the aviation industry faces when it comes to climate change but also recognise the vital contribution to the UK economy that the industry makes.
"Without expansion we will see further congestion, stagnation in the sector and will struggle to keep pace with global competitors.
"We urge the Government to ensure that Heathrow expansion fits within its Paris climate obligations and does so as quickly as possible. We need to get this done."
Nadine Houghton, national officer of the GMB union said: "Heathrow expansion is a complicated issue, but we have consistently backed it because the benefits more than outweigh any risks.
"Expansion would protect the existing 80,000 jobs, create a further 114,000, as well as 10,000 apprenticeships."
Transport Salaried Staffs Association general secretary Manuel Cortes said: "When he was London mayor, Johnson promised to lie down in front of the bulldozers at Heathrow, but it was a Labour London mayor, Sadiq Khan , who brought the successful appeal against the expansion to court.
"Now it's time for Johnson to make good on his bluster and put a stop to the runway for good."