European governments agreed yesterday to launch the long-delayed Galileo space project, which is seen as a potential rival to the US military's GPS global satellite positioning system.

The Galileo system will be built around 30 satellites occupying three circular earth orbits at an estimated cost of more than $4 billion (€3.37 billion).

When it is up and running, the system should be able to pinpoint people, vehicles or locations to within a few metres.

The decision by the European Space Agency will create up to 140,000 new jobs and boost the fortunes of European technology companies such as the former Irish-based firm, ParthusCeva.

ParthusCeva, which was formed last year from the merger of Parthus and a division of the US firm DSP Group, has been involved in the Galileo project since its inception.

Prof Tony Pratt, a technical director at ParthusCeva, is a member of the Galileo Signal Task Force of the European Commission, which led the project.

European Space Agency officials said yesterday Galileo would be a civil system that would be complementary to the existing GPS system, which was initially set up by the US military.

In a statement yesterday, the European Space Agency said an agreement had been reached among its member states - Norway, Switzerland and the 15 European Union states excluding Greece and Luxembourg - that finalises the conditions of their participation in the project.

The Galileo programme was delayed for more than a year when Italy and Germany vied for influence over the project.

It has been opposed by the US, which has accused the Galileo programme of being redundant in light of its GPS system.

The Galileo system should be in operation by 2008.