Barrot said the year-end deadline to conclude the negotiations would again be missed. Original plans called for a deal to be concluded by late 2005.

The Commissioner also revealed that the start-up budget of Euros 1.5 billion is still about Euros 200 million short and that talks with national governments are continuing to finalize this budget.

Website euobserver.com quotes Barrot saying at a conference: "No one has an interest in seeing these talks fail. I think that even if there is a little delay in signing this concession contract, things are on the right track."

EU ministers are set to choose the location of the ambitious project's headquarters this week. Eleven countries — France, Spain, the Czech Republic, Slovenia, Germany, Malta, Belgium, the U.K, the Netherlands, Greece and Italy — have applied to host the public body to oversee the programme dubbed the Galileo Supervisory Authority.

Ahead of this choice, the European Commission has launched an open consultation on how Europe should make the best use of the satellite navigation applications that will emerge once Galileo is completed.

The European system, estimated to cost Euros 3.2 billion for a 30-satellite network, is due to be operational by 2011 and is expected to be used in a variety of applications ranging from traffic navigation to weather tracking and security of financial transactions.

The four-month public consultation period is also meant to explore and debate the role of authorities in regulating Galileo, including meeting concerns over privacy.

"Galileo ... presents a unique opportunity for new applications, economic growth and job creation in the European Union," said Barrot as he launched the consultation.