EU governments have agreed that the troubled Galileo satellite navigation network needs to be built with public funds if it is to get off the ground.
So far, only the test satellite Giove-A is flying in orbit
The project, supposed to showcase Europe's technological prowess, has been hit by delays and cost overruns.
But transport ministers meeting in Luxembourg on Friday put off tackling the question of where exactly the new taxpayer money will come from.
The four billion euro (£2.7bn) system is supposed to be functional by 2012.
Its 30 satellites will beam radio signals to receivers on the ground, helping users pinpoint their locations.
Lack of progress on the project had become an embarrassment for the EU; Galileo should have been an example of technological co-operation.
Instead it had become bogged down by private sector squabbles and member states pushing individual industrial interests.
Last month, the European Commission (EC) proposed using taxpayers' money - not private finance as was originally envisaged - in an attempt to move the project forward.
The Commission took drastic action after the consortium asked to run Galileo - comprising EADS, Thales, Inmarsat, Alcatel-Lucent, Finmeccanica, AENA, Hispasat, and TeleOp - missed a deadline to adopt a common negotiating position.
Under new proposals for the future development of Galileo, these companies will now be offered the opportunity to run the system - but only after the public sector has built it.
GALILEO UNDER CONSTRUCTION
A European Commission and European Space Agency project
30 satellites to be launched in batches by end of 2011-12
Will work alongside US GPS and Russian Glonass systems
Promises real-time positioning down to less than a metre
Guaranteed under all but most extreme circumstances
Suitable for safety-critical roles where lives depend on service
Agreeing that the project "would need additional public funding" to be operational by 2012, the ministers tasked the EC with working out financing details before their next meeting in October.
German Transport Minister Wolfgang Tiefensee told journalists Galileo was of "colossal importance" to Europe, adding: "We must prove our worth in this field of technology in competition with the United States, Russia and Asia."
The Galileo system is expected to drive a huge 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 market value of these sat-nav services could be worth 450bn euros a year by 2025.
The first demonstrator spacecraft, Giove-A, is already in orbit. A second, Giove-B, which has had some technical problems, should be in orbit by the year's end.
The contract for the first four satellites proper in the final constellation was awarded at the end of 2004. Under the new arrangement, the public sector would now order the remaining 26.
During the course of the next six years, this will require Europe's ministers to release an extra one billion euros over and above the funds they were probably going to have to make available under the public-private partnership (PPP) originally envisaged.
The Commission's view, however, is that the certainty and simplicity this brings to the Galileo project makes the proposed solution the best way forward in the long run.
Satellite navigation systems determine a position by measuring the distances to a number of known locations - the Galileo satellites
The distance to one satellite defines a sphere of possible solutions; the distances to four satellites defines a single, common area
The accuracy of the distance measurements determines how small the common area is and thus the accuracy of the final location
In practice, a receiver captures atomic-clock time signals sent from the satellites and converts them into the respective distances
The whole system is monitored from the ground to ensure satellite clocks do not drift and give out misleading timings