Klaus Ebermann, head of the European Commission Delegation in China, said the stake was worth 200 million euros (230 million US) although the figure was not mentioned in a joint EU-China statement.

The signing at the Great Hall of the People in central Beijing was witnessed by Italian Prime Minister Silvio Berlusconi, the current EU President, European Commission President Romano Prodi and Chinese Premier Wen Jiabao.

The Galileo Joint Undertaking is a venture between the EU and the European Space Agency and will rival and likely outperform Global Positioning System (GPS) of the United States.

China, which launched its first-ever manned space flight earlier this month, will also cooperate with the EU on satellite navigation through joint work on research and development, manufacturing and technical aspects of the Galileo project such as radio frequencies.

Galileo, scheduled to be operational by 2008, is designed to encircle the globe with 30 satellites in medium Earth orbit, comprising 27 operational satellites and three reserves, plus two control centres on the ground.

It should provide users, ranging from aircraft and shipping to cars and trekkers, with a navigational fix accurate to within just one metrefeet), more accurate than the US GPS system.

At present, the only global satellite navigation system available to civilians is GPS, but it is accurate only to 100 metres (325 feet) for civilians, or 22 metres (71 feet) for the military, and is under the control of the Pentagon.

Galileo's total development and launch costs are put at around 3.2-3.3 billion euros (3.6-3.7 billion dollars), with initial running costs from 2008 onwards of around 220 million euros a year.

SPACE.WIRE