Galileo 'compromise' is emerging

No one company will be allowed to win more than two of the six segments of work offered to build the system.

The commission hopes the arrangement will pacify countries such as Germany which wants assurances about the distribution of industrial contracts.

Germany has been holding out against a refinancing of Galileo, which is likely to cost close to 4bn euros (£3bn).

Galileo's planned network of 30 satellites will beam radio signals to receiving devices on the ground, helping users pinpoint their locations and know the precise time. The European system's technologies promise greater accuracy and reliability than is afforded by the current American network (GPS) alone.

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

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Q&A: Europe's Galileo project

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But Galileo has been beset with industrial and political squabbling across EU member states, and its timeline has repeatedly slipped as a result. A private consortium charged with building two-thirds of the network collapsed earlier this year, and now the commission is trying to rescue Galileo using public funds.

However, its suggestion of using unused agricultural and administrative funds from within the EU's budget has been opposed by a number of countries - notably Germany.

Friday's new proposal aims to ensure fair competition in the bidding for new contracts, and the German transport Ministry welcomed it as an acceptable compromise.

A large order for spacecraft must be placed very soon with contractors if Galileo is to keep to its present 2011-12 target for full operational deployment.

A final decision on funding could come from the EU leaders at a mid-December summit in Brussels.

"If we don't have a clear agreement before the end of the year, then this would mean that we will have to put an end to our efforts because this would be clearly too late," a spokesman for EU Transport Commissioner Jacques Barrot said.

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