Canada's industry minister on Thursday blocked the sale of leading space firm MacDonald Dettwiler and Associates to a US defense contractor, as some feared a major setback in Canada's space capabilities.

A spokeswoman for Industry Minister Jim Prentice said in an email, the minister "is not satisfied that the proposed sale of MacDonald, Dettwiler and Associates Ltd. to ATK is likely to be of net benefit to Canada."

Under Canadian law, US firm Alliant Techsystems (ATK) now has 30 days to appeal the decision.

If it fails to sway the minister, this would be the first time Canada has nixed a foreign takeover.

The sale of MacDonald, Dettwiler and Associates (MDA), builder of the robot Dextre attached to the International Space Station, to ATK for 1.3 billion dollars (Canadian, US) was announced in January.

Since then, two MDA engineers quit in protest over the sale and another testified to a parliamentary committee on behalf of 12 employees opposed to the sale.

Opponents of the deal say the future of Canada's space industry, national security, and even its Arctic sovereignty could be jeopardized by the sale of MDA to a foreign firm.

They argue that MDA's powerful observation satellite Radarsat-2, launched in December with 445 million dollars in Canadian government funding, and a key tool in mapping and keeping an eye on the Arctic, would be lost to Canadians.

Canada is at odds with the United States, as well as Russia, Denmark, and Norway over 1.2 million square kilometers (460,000 sq. miles) of Arctic seabed believed to hold 25 percent of the world's undiscovered oil and gas reserves.

"As it stands, all the evidence points to a sale that will cripple one of Canada's great industrial success stories, in favor of handing over state-of-the-art technology to an American arms manufacturer," said opposition New Democrat MP Peggy Nash.

"It's a huge waste of years of strategic economic investment and the hundreds of millions of Canadian taxpayer dollars in MDA."

Proponents of the deal, including MDA executives and shareholders, say the firm might lose out on lucrative US contracts if it does not complete the sale to ATK.

In addition to Dextre and Radarsat-2, the Richmond, British Columbia-based company also developed the space robotic arm Canadarm used by NASA.

Dextre was only successfully installed on the international space station mid-March, after a few glitches.