The government is set to announce funding to begin a satellite navigation project to rival the EU’s Galileo system, in which the UK has already invested 1.4 billion euros (£1.2bn).
The Treasury has set aside funding for a feasibility study for the satellite project, which on its own could cost £100m.
The project is a response to the UK being told it will have restricted access to sensitive EU security information after it leaves the bloc in March, according to several reports citing unnamed government sources.
The EU has said that the UK will continue to be able to use Galileo’s open signal, but that its military will not have access to the secure, encrypted elements of the system following its exit from the European Union.
In April Business Secretary Greg Clark told the BBC the government would “look at alternatives” if Galileo no longer met Britain’s requirements.
Galileo, commissioned in 2003 and set for completion in 2020, is designed as an alternative to the US’ Global Positioning System (GPS).
The UK has participated in its development and its armed forces had been planning to make use of it upon its completion as a supplement to GPS.
Galileo is set to cost a total of 10bn euros, with an independent British system likely to cost several billion pounds.
The government reportedly believes the feasibility work would allow the UK’s space sector to remain at the forefront of the industry, whether or not a system is actually commissioned.
If the satellite network is given the green light, ministers would aim for costs to be comparable to what had been set aside for Britain’s contribution to Galileo.
The UK has also said it plans to demand a repayment of up to 1 billion pounds for work carried out on Galileo.
The Department for Business, Energy and Industrial Strategy declined to comment on the funding plans.
The UK Space Agency has said a British satellite project would be able to draw on the existing UK-based capability that had been developed for Galileo.
It has said the system would be simpler to build than Galileo since it would only need to serve a single country, rather than the dozens who are to use the EU system.
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