Virgin boss Sir Richard Branson has signed a £14m agreement which will see his company take passengers into space.

The British entrepreneur is having five "spaceliners" built in the US by the team behind the SpaceShipOne vehicle.

The California-based rocket plane became the first privately developed carrier to go above 100km in June.

Sir Richard says it will cost around £100,000 to go on a "Virgin Galactic" spaceliner, and the first flights should begin in about three years' time.

Sir Richard revealed his new venture at a briefing held on Monday at the Royal Aeronautical Society in London.

"We've done quite a lot of research; we think there are about 3,000 people out there who would want to do this," Sir Richard told the BBC.

"If it is a success, we want to move into orbital flights and then, possibly, even get a hotel up there."

'Historic' step

The deal is with Mojave Aerospace Ventures, the company set up by aviation pioneer Burt Rutan and Microsoft co-founder Paul Allen to exploit the technology developed for SpaceShipOne.

SpaceShipOne is one of more than 20 craft vying for the $10m (£5.7m) Ansari X-Prize, which rewards the first team to send a non-government, three-person craft over 100km (62 miles) into space, and repeat the feat in the same carrier inside two weeks.

The Virgin boss was flanked at Monday's announcement by Rutan, who has already collaborated with Sir Richard on Virgin GlobalFlyer, a jet plane designed to fly non-stop around the world without refuelling.

"Virgin has been in talks with Paul Allen and Burt throughout this year and in the early hours of Saturday morning signed a historical deal to license SpaceShipOne's technology to build the world's first private spaceship to go into commercial operating service," said Sir Richard, who founded the Virgin Group of companies.

Commentators said it was a logical next step for someone to come in and move the SpaceShipOne technology into the commercial flight business.

David Ashford, director of UK-based Bristol Spaceplanes Limited, another X-Prize contender, said space was finally being opened up for ordinary people.

"The price will come down - there's no doubt about that," he told BBC News Online.

"The X-Prize has succeeded in doing what it set out to do. The original idea was to break the mould of thinking - to break Nasa's monopoly on space policy. Space tourism should have happened many years ago."

Design, build and testing

Mojave Aerospace Ventures has been asked by Sir Richard to produce a bigger version of SpaceShipOne. The Virgin SpaceShip (VSS) will carry five passengers compared with the two-passenger capacity currently offered by SpaceShipOne.

The final design for the maiden ship, the VSS Enterprise, should be signed off in 2005.

The vehicle will then have to be built and tested before beginning a scheduled space service.

"Every passenger will have a spectacular view; they will have considerable windows and luxurious seats," Sir Richard said.

"Initially, they will take off from the Mojave Desert near Los Angeles. It will be a three-hour journey. Passengers would have about a week's training prior to taking off."

The Virgin Group has interests in a range of businesses, including trains, finance, soft drinks, music, mobile phones, holidays, and cars.

Globally, Sir Richard is probably best known for his Virgin Atlantic airline and for his speedboat and ballooning adventures.

He said many of the group's existing pilots would be in line to take the controls of a VSS vehicle after the necessary training.