EU approves Galileo project

The EU's Galileo project is seen by the U.S. as a rival to its GPS system (above)

BRUSSELS, Belgium -- The European Union has agreed to provide funding for a major satellite navigation network that will rival Global Positioning System (GPS).

EU Transport ministers passed a budget of 450 million euros ($396 million) to pay for the four-year development of the Galileo system.

The sum does not include 100 million euros already authorised and 550 million euros from the European Space Agency (ESA).

"There is an agreement on the draft regulation (on Galileo)," an EU spokesman told reporters following the meeting on Tuesday.

Galileo is a 3.4 billion euro plan to create a network of satellites to rival GPS which was designed in and manufactured by the United States.

QUICKVOTE Do you think a rival to GPS is needed? Yes No View Results

The project, which is expected to create more than 100,000 jobs, is set to be launched in 2006 and begin operating two years later.

The system will consist of 30 satellites and could be used in traffic management, aviation navigation, oil prospecting and scientific research.

It will be mainly for civilian use and as a result will be less likely to be switched off during conflicts, EU officials say.

Andrew Coates, of University College, London, told CNN: "Galileo will deliver one-metre accuracy to a handset or to a mobile phone, so there's much better resolution and it's a much better technical product (than GPS)."

There are currently two space navigation networks -- the GPS and Russia's Glonass, although the latter is no longer fully operable.

Both are made up of military satellites that beam signals which civilians with hand-held receivers can use to pinpoint their position with an accuracy of several tens of yards.

Galileo is expected to be far more precise, down to a single metre accuracy.

The U.S. regards Galileo as a challenge to its superiority in space technology and argues that it duplicates GPS.

Paul Wolfowitz, the Deputy U.S. Defense Secretary, has told the EU that Galileo would "significantly complicate our ability to ensure availability of critical military GPS services in a time of crisis, and at the same time assure that adversary forces are denied similar capabilities."

But French President Jacques Chirac has said Galileo will mean that the EU "would not have to accept Europe's subjugation in space matters."

Chief European Commission spokesman Jonathan Faull said earlier this month: "On the compelling need, that is a matter for Europe, not for the United States.

"We are absolutely convinced that there is a real need for the Galileo system. It is not in our interest, we don't believe it is in the wider interest either, to have only one system."

The U.S. has said that if the EU goes ahead with Galileo, it wanted cooperation to ensure that the European system was interoperable with GPS.