April 25, 2018 / 1:13 PM / 5 months ago

UPDATE 2-Britain considers setting up satellite system to rival EU's Galileo -FT

(Adds Airbus and UK Business department comment)

LONDON, April 25 (Reuters) - Britain is considering setting up a satellite navigation system to rival the European Union's Galileo project amid a row over attempts to restrict Britain's access to sensitive security information after Brexit, the Financial Times reported.

Galileo, a 10 billion euro satellite programme being developed by the EU as a rival to the U.S. Global Positioning System, has emerged as a flashpoint between Britain and the bloc with the EU already beginning to treat the UK as having left.

A spokeswoman for Britain's Department for Business, Energy and Industrial Strategy said Britain wanted its membership of Galileo to continue but would react if it was frozen out.

"The UK’s preference is to remain in Galileo as part of a strong security partnership with Europe. If Galileo no longer meets our security requirements and UK industry cannot compete on a fair basis, it is logical to look at alternatives," she said.

The European Commission has started to exclude Britain and its companies from sensitive future work on Galileo ahead of the country's exit from the EU in a year's time, a move which UK business minister Greg Clark said threatened security collaboration.

"We have made it clear we do not accept the Commission’s position on Galileo, which could seriously damage mutually beneficial collaboration on security and defence matters," he said in an emailed statement.

Britain has called on the European Commission to reverse its position and allow UK-based companies to be eligible to bid for upcoming Galileo contracts, the spokeswoman said.

The Commission's exclusion of British-based companies has meant Airbus has had to commit to move some of its UK-based Galileo operations to an EU country after Brexit, a spokesman for the European planemaker said.

Airbus operates Galileo's ground control services from Portsmouth in southern England and the spokesman said that about 100 jobs would be put at risk if it has to move.

Britain has played a big part in Galileo so far, carrying out about 15 percent of the work on it. Clark said that if Britain were excluded it could result in years of delays and higher costs for the project "stretching into the billions".

The FT also said Clark was taking legal advice on reclaiming the 1.4 billion euros Britain has invested in Galileo since the project started in 2003. (Reporting by Sarah Young; editing by Stephen Addison)

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