There is to be a 12-week consultation on whether the UK should have its own dedicated space agency.
The Science Minister Lord Drayson is supportive of the idea but wants to hear the views of academics and industrialists.
Currently, British space policy is devised by a "partnership" of government departments and research councils operating devolved budgets.
The minister says Britain would benefit from a more strategic approach.
"Both in terms of raising the profile of space, which is a fantastic asset in the UK, and in terms of organising ourselves more efficiently, I think that an agency is the way to go," he told the BBC.
The House of Commons Select Committee on Science and Technology looked at the issue in 2007 and narrowly concluded that an agency was only worth setting up if the UK increased its civil spend on space substantially. At the moment, the government invests some £250m a year, mostly channelled through the European Space Agency (Esa).
But Lord Drayson said the benefits were strong even if no extra funds were forthcoming, and urged people to set aside the budgetary issue for the time being.
Whereas Germany, France and Italy have national space agencies that speak with single voices backed up by single budgets, the UK's approach is to devolve space policy decisions to a club of "users" facilitated by a civil service unit called the British National Space Centre (BNSC).
These users are the government departments and research councils that have interests in space science or space-borne services. The arrangement is supposed to ensure that limited space funding chases "need" and "value".
But critics say the inability of this club sometimes to adopt coherent positions on complex programmes means that UK delegations often find themselves marginalised when they go into international negotiations.
Lord Drayson cited the example of the European GMES (Global Monitoring for Environment and Security) programme. This is a joint endeavour of the European Space Agency (Esa) and the European Commission which seeks to build a coordinated system for Earth observation and monitoring.
Many politicians agreed it was the perfect project for the UK because of the country's vocal position on climate change.
But Britain went in late to the multi-billion-euro venture and only caught the second opportunity after some last-minute funding was organised by the Treasury. Industry has complained that the confusion over GMES cost UK companies the chance to bid for satellite contracts.
Phil Willis MP, the Liberal Democrat chair of the HoC Science and Technology Committee, said the consultation was "excellent news".
"The principle of a space agency is one which we as a committee supported to give a central focus to space exploration, and particularly the UK's eminent position in terms of robotics," he said.
"My personal view is that it is still worth having [even without a budgetary increase], but quite frankly without very significant additional funds, what you have is an organisation in name with very little clout."
This is an important week for UK space.
On Wednesday, the European Space Agency will formally open its new technical centre at Harwell, Oxfordshire. The UK is the only major Esa contributor not to have such a showcase facility.
The British government last month also initiated a panel to review space activity in the country.
The Space Innovation and Growth Team (IGT) will attempt to identify key trends and then list the actions industry and government need to take if they want to fully exploit the changes that are coming over the next 20 years.
Lord Drayson already has a report on his desk that looks at the role Britain could play in the future exploration of the Solar System given its current areas of expertise.
Esa accepted helicopter test pilot "Major Tim" Peake into its astronaut corps in May.
Major Tim is the first Briton to make the corps.