"We agreed to not push back indefinitely" questions about the system, Merkel told a press conference held with visiting French President Nicolas Sarkozy.

Galileo was designed to compete with the US Global Positioning System (GPS) but has been repeatedly delayed by financing problems.

"We are going to ask our transport ministries to draw up concrete proposals for the council of European transport ministers," to be held in mid December, Merkel added following a joint meeting of French and German cabinets in Berlin.

She expressed regret that "many delays had accumulated since the beginning of this project."

Sarkozy said he hoped the Franco-German proposals would be ready "if possible before November 30."

In June, EU officials decided to forego private participation in the creation of a 30-satellite navigational grid, leaving it up to the EU to find 2.4 billion euros in additional funding.

Under the European Union's 2008 budget proposals, overall funding for the ambitious project was set at 151 million euros.

Although the EU executive commission planned to get the extra money from unused agricultural funds, several countries including Germany disagreed.

Berlin said that only EU member states that participated in the European Space Agency should take part, because that would provide them with a fairer level of return on their investment.

Work on Galileo, supposed to be a showcase for Europe's technical prowess, has stalled as cost over-runs piled up, private contractors bickered and member nations pushed their own industrial interests.

It was originally slated to launch in 2008, but it is now set to be deployed in 2013.

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