UK researchers have claimed a key milestone in the development of a next-generation satellite navigation system.

Galileo test satellite Giove-A, built in Guildford by Surrey Satellite Technology, is a key part of a project that aims to bring benefits to drivers, pilots and sailors as well as sectors that have not used satellite navigation before, such as air traffic control, the emergency services and rail networks.

The satellite could also be accessed by mobile phone users to find out local information such as local cinema listings or directions to the nearest restaurant.

Giove-A is due to be launched from Baikonur, Kazakhstan by the end of December 2005. It will broadcast the very first Galileo signals from space and together with Giove-B, a second test satellite developed by Galileo Industries which includes UK-based firm EADS Astrium, will trial new technology.

Science Minister Lord Sainsbury said: "Galileo offers an opportunity to increase the information services provided by satellites and make a real difference to people's lives.

"I am very proud that UK engineers and their world-class satellite technology are playing a leading role in this ambitious European programme."

Galileo is a joint European Space Agency/European Union Trans-European Networks programme. Due to be operational in 2010, the civil system will comprise 30 satellites and is designed to complement the existing US GPS and to provide additional value-added and safety-critical services.

The UK government is one of four major contributors to Galileo, along with Germany, France and Italy. To date the British National Space Centre and the Department for Transport have invested over €136m in the project.

The 660kg Giove-A satellite is the first to use Surrey Satellite Technology's Geostationary Minisatellite Platform, designed to carry a wide range of communication and navigation payloads. The satellite was designed, built and tested in 27 months.

Professor Sir Martin Sweeting, chief executive at Surrey Satellite Technology, said that this is the first time the company has developed a complete satellite for the European Space Agency. "Giove-A is our largest and most complex satellite to date," he explained.

A 25-metre antenna at Chilbolton Observatory in Hampshire will detect Giove-A's signals. The observatory is an outpost of the Rutherford Appleton Laboratory.