UPDATE 2-With Spain, EU satellite project gets full backing

(Adds quotes from ministers, background)

By Jeff Mason

BRUSSELS, Nov 30 (Reuters) - The European Union's planned satellite navigation system cleared a major hurdle on Friday, gaining backing from all EU countries including Spain.

Problems have plagued the project, meant to rival the U.S. Global Positioning System, ranging from squabbles about national influence to questions about its viability, timing and cost.

Twenty-six of the bloc's 27 members backed a proposal late on Thursday on distributing the work on the 30-satellite system, but Spain opposed the plan and sought assurances that it could house a ground control centre.

On Friday ministers amended the deal to specify that control centres in different EU states could operate as a network.

That convinced Spain, which had been dissatisfied with assurances that its planned centre to deal with search and rescue operations would function someday as a full control centre such as those in Italy and Germany.

"I'm not laughing, but I'm not crying," said Fernando Palao, general secretary for transportation at Spain's ministry for public works. "It's an acceptable text."

Portuguese Transport Minister Mario Lino, whose country holds the EU's rotating presidency, noted: "Today we are all united by Galileo."

EU Transport Commissioner Jacques Barrot told reporters the deal would not divert funds away from the centres in the two other countries.

MOVING FORWARD

With a deal in place, the EU is about to expand in outer space while becoming the first-time owner of infrastructure worth billions of euros.

Once the necessary regulation is approved by the European Parliament and EU governments in March, the European Space Agency will have the authority to start a tender for contracts, which it hopes to finish by the end of next year.

The deal splits the work into six main segments and distributes tasks evenly among a few prime contractors and subcontractors.

Members of the original consortium charged with building Galileo -- a group that pulled out of the project this year after infighting and worries about future profitability -- are expected to apply in the new tender.