In a resolution adopted Thursday, the parliament said it was "deeply concerned by the fact that the concession negotiations have been at a standstill for several months."

EU lawmakers expressed particular concern that the delays would drive up the costs of the programme, which is priced at 1.5 billion euros (1.95 billion dollars) and meant to be fully operational in 2012.

Nearly two years since a consortium was chosen in June 2005, the concession contract for the project remains unsigned as the companies squabble over who will do what. They have been given until May 10 to work out there differences.

The system is aimed at breaking Europe's dependence on the free US Global Positioning System (GPS), used aboard many cars, boats and aircraft.

Despite the programme's problems, EU Industry Commissioner Guenter Verheugen ruled out the possibility of calling off Galileo, describing the project as essential.

"Galileo is from the European Commission standpoint an absolutely essential project," he told journalists in Brussels. "We don't have an option of giving up on Galileo."

The current consortium comprises Britain's Inmarsat, the European group EADS, French firms Thales and Alcatel, Spain's Hispasat and Aena, Italy's Finmeccanica and Germany's TeleOp.

Industry sources have accused Hispasat of causing the delays with demands for a bigger role than initially foreseen, although the Spanish government has dismissed such claims.

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