"The presidency announces that it was possible to have the agreement of all the delegations, without exception, on Galileo," said Portuguese Transport Minister Mario Lino, whose country holds the EU's rotating presidency.

"We have always thought that it was best to be united on a project that is so important for Europe," he said.

The long-delayed European project is meant to challenge the dominance of the US-built Global Positioning System (GPS), which is widely used in satellite navigation devices in vehicles and ships.

In a move late Thursday that deeply angered Spain, Portugal changed the voting system to reach a deal on the flagship project, allowing a qualified majority vote, rather than the unanimous decision that is usually required.

Spain will play host to a "Safety of Life" ground centre dedicated to civil protection, in particular in the area of maritime, air and rail security.

But it had demanded that, like Germany and Italy, it be allowed to host a control centre for the future 30-satellite scheme aimed at showcasing Europe's hi-tech know-how and due to come into operation in 2013.

Under the compromise reached Friday, its "Safety of Life" centre could "evolve into a fully qualified" control centre by 2013, allowing Madrid to supervise operation of the satellites and their transmissions to Earth.

"The Spanish centre, once it is up and running from a technical point of view, would act as a control centre along with the others" in Germany and Italy, EU Transport Commissioner Jacques Barrot explained.

"We have succeeded in uniting our two main objectives: (increasing) competition ... and avoiding that Europe's space enterprise be knocked out of contention," he added

Spain's General Transport Secretary Fernando Palao told reporters: "We have received sufficient guarantees."

The Galileo scheme has been dogged by controversy.

Work on the project, already running five years behind the initial schedule, stalled this year as cost over-runs piled up, private contractors bickered and member states lobbied for their own industrial interests.

As the original public-private partnership involving a consortium of eight European companies fell apart, the European Commission recommended that the project should be relaunched using public money entirely.

Meanwhile the US military is already working on super-powerful updates to its GPS technology to try to trump Galileo before it even gets up in the air, according to military experts there.

Under the agreement hammered out by the EU transport ministers, the ceiling for costs for the 2007-2013 period was set at 3.4 billion euros (five billion dollars).

The European Commission has divided the work into six segments consisting of the satellites, launchers, computer programmes, ground stations, control stations and the system's operation.

Tenders "should be open to the maximum possible competition", the agreement said.

Companies will not be able to have more than two of the contracts and at least 40 percent of the work will have to be sub-contracted out to ensure that smaller companies also get to participate in the project.

Satellite navigation, which allows users to pinpoint their location anywhere on Earth, is expected to be at the heart of new technologies for steering cars or guiding boats as they arrive at ports, or aircraft as they come into land.

It could also be used in accident assistance, search and rescue missions, to monitor fishing boats or container ships as well as mineral prospecting by miners, building pipelines, financial transactions or leisure activities.

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