By Jonathan Amos
BBC News science reporter
The Galileo satellite navigation system took another important step forward on Tuesday with the go-ahead being given to build its first four spacecraft.
The first four sats will be sent up in 2008
The satellites will be launched in 2008 with the whole constellation of 30 expected in orbit by the decade's end.
The "authorisation to proceed" came with the signing of a 150m-euro contract between the European Space Agency (Esa) and Galileo Industries.
The latter has been charged with building the system's infrastructure.
Galileo will be compatible and interoperable with the US Global Positioning System (GPS), improving the accuracy and reliability of navigation and timing signals received across the planet.
On the move
The new constellation will be a joint venture between Esa and the European Union (EU).
On 10 December, EU transport ministers gave their approval to the project. Tuesday's preliminary contract signed in Paris for the so-called In-Orbit-Verification-Phase is the next step.
It will see not only the construction of the first spacecraft but the building of ground station facilities to operate them.
WHAT IS GALILEO?
Europe's own global satellite navigation system
Will work alongside US GPS and Russian Glonass systems
Promises real-time positioning down to just a few metres
Guaranteed under all but most extreme circumstances
Suitable for safety-critical systems - can run trains, guide cars and land planes
A full contract, worth more than a billion euros, should be signed next year; and this will clear the way for the whole constellation to be put in orbit.
"After extensive discussions, this authorisation to proceed enables us, at last, to get started on building the Galileo satellites," said Evert Dudok, from EADS Astrium, the major shareholder company in the Galileo Industries consortium.
"By the end of the decade, a global independent satellite navigation system, under civil control, will be available to all."
The new European constellation is expected to drive a multi-billion-euro industry in which receivers find their way into many more markets - from consumer devices such as mobile phones to safety-critical applications such as guided trains and buses.
Analysts estimate the industrial spin-offs could create 150,000 jobs.
Washington and Brussels signed an agreement in June to adopt compatible operating standards.
These technical parameters will allow either side to effectively jam the other's sat-nav signals in a small area, such as a battlefield, without shutting down the entire system.
This ability was demanded by US commanders who feared the European's civilian system could compromise the security of their military network.
But the June agreement also paved the way for the systems to be meshed seamlessly, greatly benefiting manufacturers, service providers and consumers.
THE GALILEO FUTURE
Expected to be more than 400 million sat-nav users by 2015
European aerospace and electronics firms say it will create more than 100,000 jobs
Rescue services will be able to pinpoint the exact location of a car driver's accident
Will allow someone to find their way in an unfamiliar city using their mobile phone
Better accuracy, especially in built-up areas where the current GPS signal can be patchy, should lead to a bigger demand for positioning devices.
Although Galileo Industries has been asked to build the system, two private consortia are fighting to obtain the contract to operate Galileo.
The Eurely alliance includes Alcatel, Finmeccanica and Vinci; while the iNavsat consortium comprises Thales, EADS and Inmarsat.
European ministers are expected to decide on a winner in the next few months.
The first demonstrator spacecraft should be launched next year.
These will secure the frequencies allocated by the international community to Galileo and allow in-orbit testing of key technologies, such as the atomic clocks which are essential to the system's operation.