Obama's message to private sector: you have lift-off

The US has agreed a $1.61bn down-payment on the development of a private-sector space programme, as part of a revamp of Nasa designed to outsource much of the day-to-day business of travel to the stars.

After months of wrangling, Congress has approved a $58.4bn three-year budget plan for the US space agency, which will funnel huge subsidies to a host of private companies engaged in a 21st-century space race – to make profits beyond the Earth's atmosphere.

The compromise deal, sealed late on Wednesday night, was greeted withrelief in the public sector, and in communities reliant on Nasa engineering jobs, and with excitement in the private sector. President Barack Obama had proposed sweeping cuts to Nasa programmes, including to development work on a new rocket to replace the space shuttle and ferry Americanastronauts to the International Space Station. The private sector will now be expected to transport astronauts, while Nasa will instead begin in-house work on a rocket that might be used forfuture trips to the moon and,potentially, to Mars.

Companies both large and small are gearing up to bid for Nasa contracts. Last month, Boeing said it would build capsules much like the Apollo capsules, and send them up to the ISS carrying not just astronauts from Nasa but tourists, too. The company said that, in order for outsourcing from Nasa to be viable, there would also have to be a parallel space tourism industry.

Boeing has teamed up with SpaceAdventures, a marketing outfit that has already arranged for seven rich individuals to visit the ISS on Russia's Soyuz spacecraft.

A string of entrepreneurial outfits – most vociferously Space Exploration Technologies, created by Elon Musk, co-founder of PayPal – are also doing work they hope to continue in conjunction with Nasa. Projects includelaunching payloads into space, conducting scientific experiments in zerogravity, and ultimately putting paying passengers into space.

Charles Bolden, administrator of Nasa, welcomed the passage of the Bill. "[It will] put the US space programme on a more sustainable trajectory and inspire a new generation of Americans to pursue careers in science, technology, engineering, and mathematics," Mr Boden said. "This important change in direction will not only help us chart a new path in space, but can help usretool for the industries of the future that will be vital for long term growth."

President Obama's proposed cuts sparked a strong lobbying effort to protect jobs in particular regions, and promoters of the compromise Bill hailed it as a job-creating stimulus measure. The Bill was first crafted by the Senate, which passed it earlier last month, and its passage through the lower House of Representatives means it can now go to the President for signing.

Many lawmakers had wanted Nasa to build a single government-owned rocket to fly to the ISS and a second, even more expensive one for longer missions, but now only the second project will be developed in-house.