- A majority of EU transport ministers have approved the multi-billion euro Galileo satellite navigation project.
The decision was made without the backing of Spain, which had demanded that it host a ground station for the network of 30 orbiting satellites.
Ministers had until the end of year to reach an agreement. The system is supposed to be in operation by 2013.
Questions remain about its cost but supporters say it will create jobs and cut dependence on the US GPS service.
The Commission had said that if agreement was not reached by the end of the year, the project would essentially be dead.
The 3.4bn euro (£2.4bn) Galileo programme plans only two ground stations: one near Munich and one near Rome.
The Spanish demand was another hurdle in a programme plagued by setbacks.
"We just don't have the money for a third ground station," one EU diplomat, who wished to remain anonymous, said.
Dominique Bussereau, France's deputy transport minister, suggested Spain be given a Galileo test centre.
Spain insisted on hosting part of a control centre, an EU official told the Reuters news agency, while Italy, which will also house a centre, did not want funds diverted to a Spanish location.