The daily Handelsblatt quoted a document drawn up by aides to EU transport commissioner Jacques Barrot that promised to take into account "the industrial competence" of German companies and the role played by Germany in developing the system, which was designed to compete with the US GPS network.

Germany has held up funding for Galileo amid concern that German companies would be treated unfairly when contracts were awarded, with the French group Thales expected to get a large slice of the pie.

Barrot reportedly intends to divide the programme into segments open to tenders subject to regulations that limit the accumulation of responsibility and ensure that sub-contracting was shared equitably among participants.

According to press reports, the commissioner has identified six or seven sectors. Each project leader would have to sub-contract at least 40 percent of the work, and no more than two projects could be lead by one company.

In June, European Union officials decided to forego private participation in the creation of a 30-satellite navigational grid, leaving it up to the EU to find 2.4 billion euros in additional funding.

Under the European Union's 2008 budget proposals, overall funding for the ambitious project was set at 151 million euros (225 million dollars).

Although the EU executive commission planned to get the extra money from unused agricultural funds, several countries including Germany disagreed.

Berlin said that only EU member states that participated in the European Space Agency should take part, because that would provide them with a fairer level of return on their investment.

Work on Galileo, supposed to be a showcase for Europe's technical prowess, has stalled as cost over-runs piled up, private contractors bickered and member nations pushed their own industrial interests.

It was originally slated to launch in 2008, but it is now set to be deployed in 2013.

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