LONDON—Competing schemes to take Western Europe into a new era in extraterrestrial transportation are posing a conundrum for the continent's space planners. At the heart of the debate is just how ambitious Western Europe wants to be in its next generation of space launchers, together with whether the countries involved can put aside their contrasting approaches and agree on a common goal.

At issue is the next big transportation project for the 13-nation European Space Agency (ESA), the Paris-based, intergovernmental body that coordinates Western Europe's space activities. The agency, which was formed in 1975 and spends about $1.5 billion a year, developed the French-inspired Ariane, a conventional, expendable rocket for launching satellites. Thanks largely to the shuttle problems in the United States, the rocket is likely to be the main launch vehicle for the western world's satellites over the next two years.

ESA has already decided to spend nearly $3...

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