IT WILL tell you if your friend is nearby, warn you if a downpour is on the way and ensure that you do not crash your car.

A new multibillion-euro satellite positioning system, which will be shot into space this year, will provoke a revolution in the capabilities of your mobile phone.

Scientists are already predicting that the technology, which is the idea of the European Union and its space agency, could have as big an impact on our lives as the internet or the personal computer.

Mobiles linked to the satellite by a chip will get advanced tracking powers that will create a whole host of new uses for them.

A “buddy finder” service is expected to alert you if one of your friends is in the area and then direct you to them.

Think that the weather looks a bit iffy? The phone will give you a localised forecast to help you to avoid getting caught in a shower. It will even give a helping hand with the shopping by telling you which shops are close by, which ones are having sales and may even provide electronic discount vouchers to help you to cut the bill.

It is not just mobiles that will be transformed by the technology: cars will also be revolutionised by a tracking system that will eventually involve a constellation of 30 satellites spinning 23,200 km above the Earth.

Once equipped with a small black box, the car will automatically stop itself from getting too close to the vehicle in the front. The technology could also help to keep down your insurance bill by providing insurance companies with detailed data on your driving habits and mileage. But while consumer groups are excitedly promoting the potential benefits of what is essentially a super-advanced, Europe-wide satellite navigation system, the project — known as Galileo — is already mired in controversy.

Critics claim that there is no real need for it and that it will be just another EU white elephant. One British official has christened it the “Common Agricultural Policy in the sky”.

The costs are themselves astronomical: already €1.1 billion (about £750 million) of EU money has been spent on the project over ten years.

A further €1 billion has been set aside to spend on developing the “eye in the sky” between 2007 and 2010.

The rest of the cash will be put forward by a consortium of private companies including Inmarsat, the satellite group. Their funding is in place and ready once the contract is signed within the next 12 months. Many of the consumer benefits will be essentially free. The project founders claim that they will claw back the huge cost of the project by charging companies and government departments for services.

The European Union maintains that Galileo has “unquestionable economic viability” and suggests that the market for its services could be worth more than €200 billion by 2020. This assumption is based on a report the EU commissioned from PricewaterhouseCoopers in December 2001.

The final system should be fully functional by 2009/10.

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