In a half-billion-dollar fireworks display seen by none but destined to shake Europe's space industry, the Ariane 5-ESCA and its payload of two satellites were blown up after the launcher veered off course a few minutes into Wednesday's mission.

"It's a serious setback. Our job is difficult. It's at moments like this we are cruelly reminded of it," Jean-Yves Le Gall, director-general of Arianespace, said at launch base in Kourou.

Arianespace markets the European Space Agency's Ariane launchers.

It was the first flight of a behemoth designed to catapult 10 tonnes of payload into orbit and put western Europe into combat with two new US heavy lifters for the satellite launch market, Boeing's Delta 4 and Lockheed Martin's Atlas 5.

The doomed rocket was carrying Hotbird TM7, a TV satellite built for Eutelsat and insured for around 150 million euros (dollars), and Stentor, an experimental communications satellite built for the French space institute CNES that analysts conservatively estimated at more than 200 million dollars.

An independent commission of inquiry has been set up and should start work on December 16, Le Gall said.

Early inquiries pointed to problems with the Vulcain 2, the engine in the rocket's main stage, he said.

"(But) at the present time, it is impossible to say that the launch failure is due to a malfunction by this motor or to external disturbances," Le Gall said.

Vulcain 2, which burns liquid hydrogen and oxygen, is designed to deliver 20-percent more thrust than the previous version of the engine.

It powers the rocket for the first nine minutes of flight, along with solid-fuel boosters which help provide the muscle power to lift the rocket off the ground.

The last part of the launch comes from the final stage, which takes the payload into a transitional orbit.

The boosters worked as scheduled and were jettisoned and parachuted back as designed.

Le Gall said the first anomaly occurred after 96 seconds when there was a slight drop in pressure in Vulcain 2's coolant circuit.

At 178 seconds the engine showed "disturbance" and this started to affect the rocket's flight.

At 187 seconds the faring covering the payload was jettisoned, as expected. At 196 seconds and a height of 150 kilometres (95 miles), the rocket was on a "completely erratic trajectory" and began to lose altitude.

At 455 seconds it had fallen to just 69 kilometres (42 miles), was ordered to self-destruct. The wreckage plummeted into the Atlantic, between 800 and 1,000 kilometres (500 and 650 miles) from Kourou.

All three components -- the boosters, the Vulcain motor and upper stage -- include major modifications from the Ariane 5 as part of an ambitious programme to boost this rocket's payload capacity from 5.9 tonnes to 10 tonnes.

A first launch attempted on November 28 was scrubbed with just three seconds left on the clock after ground control computers refused to give a final OK to computers aboard the rocket.

The next Euroepan Space Agency (ESA) launch is of a satellite, on December 17, using the smaller but highly reliable Ariane 4.

Only one more Ariane 4 launch is scheduled after that before the workhorse is phased out, making ESA overwhelmingly dependent on the Ariane 5.

That vehicle's next test comes on January 12, with the launch of an unmanned spacecraft, Rosetta, which is destined to loop around Mars on a distant trip to study the comet Wirtanen.

The mission has a launch window of 20 days, which means it could be seriously at threat if the inquiry panel finds a major flaw with Ariane 5's design.

The French junior minister for industry, Nicole Fontaine, said this week's failure was "a very serious blow" for the European space sector.

Rachel Villain, executive vice president for Paris-based space consultancy Euroconsult, said it would also hit the handful of companies that insure and underwrite satellite launches.

"I think that will put them really in big trouble. Some will exit the space market, perhaps," she told AFP.

Wednesday's disaster -- ESA's ninth launch failure -- came only two weeks after a Russian Proton rocket failed in its attempt to launch the world's biggest telecoms satellite, Astra 1K, insured for 280 million dollars.

There have been now been 14 missions by Ariane 5 and the Ariane 5-ESCA. Two of those missions have ended in catastrophic failure, while two launches, in 1997 and 2001, put satellites in the wrong orbits.

SPACE.WIRE