The project has been beset by problems, first on funding when EU government heads became worried about the escalating costs when they had reached £2.3bn.

The USA also voiced doubts over the system, with the Pentagon claiming the frequencies chosen would clash with its GPS system. The US also believed the frequency structure being demanded by Brussels - in the Upper L band between 1559 and 1591MHz - could prevent US commanders from degrading navigation data to enemies.

Galileo will now move its frequencies to Binary Offset Carrier 1.1. This, apparently, will allow either side to jam the other's signal locally without shutting down the entire system.

"This agreement will allow all users to use in a complementary way both systems with the same receiver, " said Loyola de Palacio, European Commission vice-president in charge of Transport and Energy.

With more than 400 million satellite navigation users expected by 2015, Galileo will enable EU companies to take advantage of a ?multi-billion industry that will open up satnav applications in, for instance, mobile telephones, and create 150,000 skilled jobs in Europe.