Britain has given up efforts to gain access to the EU’s Galileo satellite navigation system for defence and critical national infrastructure purposes, after being frozen out by Brussels because of Brexit.
It is unclear whether the UK will get back the £1.2 billion it sunk into the project, a rival to the US GPS system that will not only support mobile phones and satnavs but also provide vital location information for the military and businesses.
Prime Minister Theresa May confirmed the UK will instead aim to build its own Global Navigation Satellite System, at a cost estimated by independent experts at £3-£5 billion.
The UK is expected to work with the US and other “Five Eyes” partners, and Mrs May said any new system must be compatible with GPS so the two systems can cover for each other if one is subject to attack.
UK contractors were told they would be locked out of work on the highly sensitive Galileo project following the 2016 vote for Brexit, when the European Commission decided that only businesses from EU countries can take part.
But Britain has been pushing for its military to be granted access to high-security encrypted parts of the system, due to be launched in 2020 and much of which was developed by UK scientists and engineers.
Mrs May sought to increase pressure on Brussels in August by committing £92 million to a scoping exercise on a possible home-grown alternative, arguing it was not acceptable for the UK simply to be an “end user” of the EU system, shut out from security discussions and contracts.
Speaking during her visit to the G20 summit in Argentina, Mrs May said: “I have been clear from the outset that the UK will remain firmly committed to Europe’s collective security after Brexit.
“But given the Commission’s decision to bar the UK from being fully involved in developing all aspects of Galileo, it is only right that we find alternatives.
“I cannot let our armed services depend on a system we cannot be sure of. That would not be in our national interest. And as a global player with world-class engineers and steadfast allies around the world, we are not short of options.”
Decisions are yet to be taken on whether it will represent good value for money for the UK to make use of the commercial side of the Galileo project.
Recent studies suggest more than 11% of UK GDP is directly supported by satellite navigation systems, and a report warned any failure of the service could cost the economy £1 billion a day.
The UK Space Agency is currently leading work, backed by the Ministry of Defence, on a planned British system to provide both open and encrypted signals with the same range of commercial and security applications as GPS and Galileo.
More than 50 UK companies have expressed interest in the project and a series of contracts are being tendered.
British Overseas Territories and Crown Dependencies around the globe would be used to provide the necessary ground-based infrastructure to deliver worldwide coverage.
Mrs May said: “What is in our national interest is to say ‘No, you haven’t allowed us full access, so we will develop an alternative, we will look at alternative options’, we are doing that work but we will work with other international partners to do so as well.”
Sources said negotiations continue on whether any of the UK’s financial contribution to Galileo will be returned.