The failure came as a severe blow to Arianespace. It was the second takeoff attempt, as the maiden launch was scrubbed on November 28 in the final seconds.

An hour after the incident, technicians had no news about the causes or the nature of the accident and Arianespace head Jean Yves Le Gall told journalists there would be no information before Thursday.

"Three minutes after takeoff, a malfunction appeared and the mission ended prematurely," he said. "Analyses will be carried out all night to find the reasons for this failure."

Le Gall apologized to customers for the failure of the Ariane rocket, which was carrying two satellites: a Hotbird TM7 for the European telecoms consortium Eutelsat and Stentor, an experimental communications satellite for the French space research institute CNES.

The incident occurred after a perfect takeoff when the rocket reached 120 kilometres (75 miles) altitude and the booster fell into the Atlantic, Le Gall said.

"From the moment when the launcher left its trajectory, it is clear that the failsafe mechanism had to do its work," he said.

"It's a serious setback. Our job is difficult, it's at moments like this we are cruelly reminded of it," he said at the base at Kourou in the French south American territory of Guiana. "We have already known failures, we will know more."

"It's normal that people should be disconcerted after such a failure," he went on, "but it is quite normal, in my position, that one looks to the future.

"We will understand, analyse, and we shall take flight again as we have done after our previous failures."

Le Gall noted that there was an Ariane 4 launch due next week "and there is nothing to put it in doubt."

The Arianespace chief was unable to give details of the cost of the failed mission.

Wednesday's flop could jeopardize Arianespace's dominant position on the commercial satellites market. The Ariane 5-ESCA is the European consortium's latest weapon in its battle with Boeing and Lockheed Martin of the United States for domination of the world satellite launch market.

Ariane 5-ESCA is a modified version of the Ariane 5 which began commercial operations in 1999.

The rocket's original capacity has been boosted from 5.9 tonnes to a massive 10 tonnes, enabling it to accommodate larger satellites and combine several of them in a single launch to slash costs.

The Ariane 5-ESCA includes several components that have never been tested in a mission before.

They include solid boosters containing more propellant to get the rocket off the ground, and a modified main-stage engine, the Vulcain 2, designed to provide enhanced combustion of liquid hydrogen and oxygen fuel.

There is also a new upper stage, the part which is used to drive the satellites into a holding orbit prior to transferring them to a permanent slot.

Launch on November 28 was automatically aborted with only three seconds left on the clock after ground control computers refused to give a final OK to computers aboard the rocket.

The problem was traced to malfunctioning sensors in so-called chill-down igniters. These are safety devices that burn off accumulated hydrogen used to cool the Vulcain engine before it begins operations.

The ESCA was scheduled to be followed in 2006 by the Ariane 5-ESCB, with a capacity to shoot 12 tonnes into geostationary orbit, the most popular slot of telecoms satellites, 36,000 kilometres (22,370 miles) from the Earth.

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