"Everything went absolutely as planned," said Bennett, whose company, Starchaser Industries, designed the 20-foot (6-meter) test rocket for its ascent to 20,000 feet (6,100 meters). "I am very optimistic that we will launch our first piloted rocket by the end of 2001."
.To win, the privately funded teams must create a spacecraft to carry three passengers into space on two flights in two weeks. The winner -- expected by 2004 -- will receive $10 million.
The bottom section of Discovery fell away at 3,000 feet (914 meters) and the second part reached, as planned, a height of 19,000 feet (5,791 meters), Bennett said.
"We got both sections back safely with a parachute," he said.
Bennett plans to pilot his X-prize rocket. A second seat on the Thunderbird spacecraft will be raffled over the Internet. A third can be purchased for U.S. $200,000.
"It has done exactly what it was meant to do, so I am very, very happy," Mr Bennett said after the launch. "My space dream is no longer pie in the sky.
"I have dreamt about moments like this for all my life and this is what keeps me going through all the difficult times when I can't even get someone to give me a tin of paint to finish the rocket."
The Starchaser is constructed of advanced composite materials. It is fitted with 3 computers, 2 parachutes and an array of undergraduate experiments from physics students on the University of Salfords space technology degree course. Its cluster of nine solid rocket motors generate over 4 tons of thrust accelerating the vehicle from 0 - 700 mph in under 3 seconds.
According to Bennet "Our next target is to send up a rocket capable of carrying a pilot into space. Were now extremely confident we can do that before the end of 2001, which would be very poetic."
Flights carrying tourists would start in 2003.
-- Don Lipper in the United Kingdom contributed to this report