BRUSSELS, Dec 16 (Reuters) - The European Commission on

Monday awarded contracts to push forward delayed plans for a

10.6 billion euro ($11.13 billion) secure European satellite

constellation in response to Elon Musk's Starlink and other

fast-growing internet networks.

The multi-orbit array of more than 280 satellites known as

IRIS² will provide an encrypted backbone for European Union

governments and public agencies, and develop new commercial

services.

"In an increasingly complex geopolitical world, ensuring

resilient, secure and fast governmental communications is

essential," Josef Aschbacher, director general of the 22-nation

European Space Agency, said in a statement, adding it would

boost European competitiveness and create jobs.

The project is the European Union's third major initiative

in space after the Galileo navigation system and the Copernicus

Earth observation network, which monitors climate change.

It has been beset by differences over industrial work share

and concerns from some countries, led by Germany, over the cost.

But officials say rapid expansion of Musk's Starlink spurred

efforts to shore up Europe's so-called "digital sovereignty".

The partially EU-funded development involves a consortium of

three satellite operators - Eutelsat, Hispasat and SES

- and calls for the first launch in mid-2029 and full

roll-out by the end of 2030.

It comes after Europe's two leading satellite manufacturers

- Airbus and Thales Alenia Space -

pulled out of the SpaceRise consortium amid concerns over

economic risks as they grapple with losses on existing projects.

Europe's satellite manufacturers are struggling to cope with

the arrival of Starlink, developed by Musk's SpaceX, which

already accounts for some two-thirds of satellites in orbit.

They also face a drop in demand for large commercial satellites.

Airbus and Thales Alenia Space, which are exploring plans to

combine satellite operations, will remain in the IRIS² project,

but as suppliers instead of full consortium members.

IRIS² coincides with growing pressure on European nations to

collaborate on defence and security, but has been overshadowed

by Starlink and Amazon's ( AMZN ) planned Kuiper internet network.

There had been concerns over the survival of the

French-backed plan after the departure in September of its

leading champion, former Internal Market Commissioner Thierry

Breton.

German defence technology start-up Helsing warned last year

that IRIS² risked missing the boat on the latest developments in

artificial intelligence because of delays in agreeing funding.

The project, which will cost an estimated 10.6 billion euros

including private funding, will be overseen by the European

Space Agency and operated from a control room in central Italy.

($1 = 0.9526 euros)

(Writing by Tim Hepher; additional reporting by Philip

Blenkinsop; Editing by Alex Richardson)