"To date there have been considerable delays," lamented German Transport Minister Wolfgang Tiefensee, who was chairing a meeting with counterparts in Brussels.

"A number of key issues such as organisation and technical issues, financial issues have not yet been satisfactorily resolved."

Twenty months since the consortium was chosen in June 2005, the concession contract remains unsigned, even though it was supposed to be inked in December that year, as the companies squabble over who will do what.

The system, worth around 1.5 billion euros (1.95 billion dollars) and meant to be fully operational in 2012, is aimed at breaking Europe's dependence on the free US Global Positioning System (GPS), used aboard many cars, boats and aircraft.

But unless the companies demonstrate progress in resolving the problems by May 10, Tiefensee said, "we (will) need to look to new ways of moving this major innovation project forward and getting it back on track."

"If the consortium were not to respond we would look at all possibilities, including a new call for tender, but we're not at that stage and I feel that this ultimatum will be respected," said EU Transport Commissioner Jacques Barrot.

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.

Barrot said the consortium had to come up with a single operating structure by May 10 with one head capable speaking for all the members.

"We need a consortium company that is capable of negotiating and taking decisions, so that the blockades are not continued," said Tiefensee. "That is why Galileo is still in a crisis."

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