The economic benefits of a third runway ay Heathrow will be almost wiped out by the increased costs to the environment, analysis by the Liberal Democrats shows.

The government's own figures suggest that ministers have underestimated by several billion pounds the financial impact of the extra greenhouse gases produced by a third runway at the airport.

Critics say the new figures show the government's support for the new runway is a "sham" and have demanded that plans to expand the airport are scrapped.

Simon Hughes, energy and climate change spokesman for the Liberal Democrats, which carried out the analysis, said: "It is time for the government to come clean on Heathrow. Ministers know the economic rationale for a third runway is a sham because their own figures prove it. By giving the green light to a third runway, the government has allowed hundreds of thousands more flights, creating a climate change disaster."

Ministers announced the Heathrow expansion plan in January, which could add another 220,000 flights a year at the west London site. The government said the climate change costs associated with the project would be £4.8bn through to 2080, which it said would leave an overall benefit to the UK economy of £4.4bn to £5.2bn. But the Liberal Democrats say this calculation was based on out-of-date figures.

The government said the extra flights would generate 181m tonnes of carbon dioxide to 2080. To work out the associated cost, it used guidance issued in 2007 from the Department for the Environment, Food and Rural Affairs (Defra) on the "shadow price of carbon". This was intended to account at the planning stages of new projects for the damage caused by extra pollution, at a price of £25 per tonne of CO2 produced. This calculation produced the £4.8bn climate cost, which still allowed for a healthy profit.

The Lib Dems repeated the calculation using revised guidance on CO2 costs published this summer by the Department of Energy and Climate Change (Decc). The Decc figures allow for increased costs over time, with the damage caused by a tonne of carbon dioxide rising to £70 in 2030 and £200 in 2050. The Lib Dems assumed a similar onward rate of increase, giving a carbon cost of £648 per tonne by 2080.

Using the Decc figures to repeat the government's calculation gives a new overall climate cost of £9.3bn to 2080, an increase of £4.5bn, which swallows almost all of the expected profit.

The Department for Transport admitted it has not yet used the revised Decc figures to recalculate its sums. In a written answer to a parliamentary question from Hughes, Chris Mole, parliamentary undersecretary at the department, said: "No revised net present value estimate for a new runway and terminal at Heathrow airport that takes account of the new carbon values published in July 2009 by Decc are available. Preliminary work since the January Heathrow decision indicates that the economic case for Heathrow's third runway is robust to the new carbon values."

Hughes said: "The government's ability to show leadership on reducing emissions is fatally undermined when it follows catastrophic policies like the third runway at Heathrow and a new generation of coal power stations. It cannot hope to meet its carbon reduction targets when it is wedded to high polluting industries like these. While the Liberal Democrats have long campaigned against a third runway, the Tories are wavering on airport expansion and Labour are ploughing full steam ahead."

Andrew Simms of the New Economics Foundation (NEF) said: "Coming up with the shadow price of carbon is really like trying to hit a moving target but this seems entirely reasonable."

In January, the NEF accused the government of "fantasy economics" to support Heathrow expansion. It argued the true environmental cost of the extra runway could be as high as £20bn, because carbon emissions released at altitude do more damage than those on the ground. Simms added that the "demonstration effect" could add to the effective carbon footprint of an expanded Heathrow, by setting an example to other countries that large, carbon-intensive development is acceptable.

The government says that aviation will account for up to 29% of UK carbon dioxide emissions by 2050 if all other industries meet CO2 reduction targets.

Lord Soley of Hammersmith, the campaign director of Future Heathrow, a coalition of businesses, trade unions and the aviation industry that supports expansion at Heathrow, said: "The British Chambers of Commerce estimates that the value of a third runway at Heathrow is £30bn, and the cost of delaying this decision further is £1bn of lost productivity every year. The UK has an important choice at Heathrow: to let the relative decline of our global connections continue, or to reinforce our competitiveness."