Air passengers will not have to pay a new surcharge on tickets to cover the soaring price of security at UK airports, the government says.
BMI British Midland have joined the criticisms of BAA
The move had been mooted as an alternative to taxpayers footing the bill or airlines paying extra costs.
But Trade and Industry secretary Alistair Darling said that industry would continue to foot the bill.
The news came as BMI British Midland boss Sir Michael Bishop became the latest airline chief to round on BAA.
Mr Darling told the BBC: "The cost of security is met by the industry.
"It always has been and that will continue."
Transport secretary Douglas Alexander will meet with BAA to resolve security issues so that the situation becomes more "manageable", Mr Darling said, adding that it is important to "strike the right balance" between security needs and allowing people to go about their business.
"Yes, there has been a lot of disruption over the last week, but I'm pretty sure we can sort out these problems," he said.
"But I am bound to say that the problem we have got is that we do have these threats and we've got to act proportionately, we've got to deal with them."
It has also been announced that a "security summit", requested by the British Air Line Pilots Association, is due to be held on Thursday.
Department for Transport officials and representatives of cabin crew, airlines and airport operators will discuss concerns about the stricter security measures.
BMI boss Sir Michael said BAA had threatened to close down his airline if it did not cut 30% of its flights last weekend.
In an interview with the Sunday Telegraph he expressed frustration with the way the airport operator had handled the situation at Heathrow - where BMI has 12% of all landing and taking-off slots.
He said BAA had been "very wooden" in their response and said that few staff understood how Heathrow operated as well as airlines did.
Other airports, including Manchester, had handled the situation much better, he said.
On Friday, Ryanair issued the government with a seven-day ultimatum to restore airport security measures to normal or risk being sued for compensation.
It estimates the disruption caused by heightened security has cost it at least £2m.
But Sir Michael said compensation was not on his list of priorities.
On Sunday, all flights from Heathrow were running as normal although hand luggage restrictions remained in place.
The alert, which began on 10 August, sparked strict restrictions on airline baggage.
Passengers are able to take on board one piece of hand luggage which must not exceed 45cm x 35cm x 16cm (17.7ins x 13.7ins x 6.2ins) - equivalent to a small laptop bag or rucksack.