A new UK Space Agency will take over responsibility for UK government policy and the key budgets for space, and bring together all UK civil space activities under one single management.

The agency, which comes into being on 1 April, will also represent the UK on space matters in all negotiations with international partners and will allow the UK to take full advantage of the opportunities offered by a world increasingly dependent on advances in space innovations and science.

British space policy and budgets have until now been handled by a partnership of government departments and science funding councils. The UK Space Agency will, step by step, assume control of these budgets and their management functions.

This will start with the ESA subscriptions currently funded by the Natural Environment Research Council, the Science and Technology Facilities Council and the Technology Strategy Board (TSB) and and subsequently managing UK interests in EU projects including the space component of GMES and the Galileo satellite navigation system.

It has also been agreed in principle that the agency will manage the UK's financial interest in the EU Satellite Centre, which is currently the responsibility of the Ministry of Defence.

The relationship with ESA will remain strong and will indeed become stronger through this arrangement. ESA's Director General Jean-Jacques Dordain said: "The UK government has given strong signs of its willingness to use space as a tool to deliver scientific progress, economic growth, industrial competitiveness and services to citizens, as well as to position the UK as a stronger player in Europe.

"Among these are the programme decisions taken at the last ESA Ministerial Council in 2008, the agreement to develop ESA facilities at Harwell and the setting up of the Space Innovation Growth Team. The creation of a strong executive agency is a consequence of such a strong political momentum.

"We at ESA see this as a clear sign that the UK wants to reinforce its space sector and its commitment to ESA. This is good for the whole UK economy, good for ESA and good for Europe. We are looking forward to working closely with the new executive space agency that is privileged to be building on the successful work the BNSC has done over the past decades."

At the launch of the UK Space Agency, it was also announced that a new International Space Innovation Centre (ISIC) would be sited next to ESA's facility at Harwell in Oxfordshire.

This will provide a central hub for British space activity and establish 'centres of excellence' in the UK for the exploitation of data generated by Earth observation satellites, using space data to understand and counter climate change, and ensuring the security and resilience of space systems and services.