EU transport ministers have agreed to fund a satellite navigational system for more than €3 billion. The network of 30 satellites, called Galileo, will rival the US Global Positioning System (GPS) and should be operational by 2008.

The Minister for Public Enterprise, Ms O'Rourke, welcomed the decision and insisted taxpayers' money would be well spent.

"I think there are good opportunities in it for Ireland. We have loads of firms that are very advanced in the kind of software that is needed," she said.

The Galileo project has been delayed by disagreements over its cost and over the level of involvement on the part of private investors. The US, which offers information from GPS at no cost, opposed the European initiative but Ms O'Rourke insisted yesterday that Europe needed Galileo.

"The US system is a military one. If there was a catastrophe or a need to intervene somewhere, the rest of us would be forgotten. We want to have our own European system," she said.

Galileo's supporters believe it will boost economic growth and the European aerospace industry claims that developing and operating the system will create 100,000 jobs.

Ms O'Rourke said small Irish companies and large firms operating in the Republic were well placed to secure some of Galileo's lucrative contracts.

The EU Transport Commissioner, Ms Loyola de Palacio, was among the first to welcome the decision. "Europe wishes to be present on the international scene in all aspects of cutting-edge technologies," she said.

The ministers also agreed to extend until the end of May an agreement to help insure airlines against the risk of terrorist attacks.

But Ms O'Rourke said this extension, which was the third since the scheme was introduced after September 11th last year, ought to be the last.