"Morale was at its lowest point in Europe, which was hardly surprising," says Charles Hanin, a former Belgian government minister, and the person who ultimately resolved what appeared to be an inextricable situation.

Amid the disarray, some were talking of a new European rocket.

It was the French who would pull it off, calling a space conference that would make history.

"The meeting began at 10 a.m. and was held in secret session, with the entire press corps waiting outside," recalled Hanin, who presided over the conference. "When we emerged at 5 a.m. the following morning, there was not a single reporter left."

But that night, the words "European Space Agency" emerged for the first time, and the catalyst of the future agency was to be the Ariane rocket.

How, out of disarray, did such a momentous agreement emerge?

"My personal feeling is that the real reason was a combination of France's firm resolve and the legacy left by General de Gaulle, who wanted Europe to have an independent access to space," Hanin said.

Hanin partially attributes the meeting's success to the United States, whose space program would launch European rockets only under strict requirements.

"We owe Ariane to the Americans - against their will - of course," Hanin said. "Their exacting demands turned against them in the end. They were the only Western nation to possess launch vehicles, but the conditions they set for launching a European communication satellite with their own rocket were totally unacceptable."

For example, Hanin said, the Americans "wanted our satellite to be functional over the European zone, which of course would have prevented Europe from extending its political and cultural influence around the world and from competing with the Americans on the global marketplace."

Differences were voiced by the European partners during those difficult negotiations, but a consensus finally emerged. France wanted the launcher, the Germans wanted collaboration on the Spacelab program proposed by NASA, and the British were promoting "Marots", a maritime communications satellite.

But each partner knew it could secure the help of the others only if it supported its neighbors' projects as well. And so, after much wheeling and dealing, the conference managed to bring the three nations together, and the European Space Agency was formed.

Ariane turned out to have been the right choice at the right time. Six years later, on Christmas Eve 1979, the first Ariane lifted off from Kourou, French Guiana. "It was a political and commercial success, as well as a technological one," recalls Hanin, now 86, who fathered it politically.

"Ariane has experienced its 'golden age' so to speak. It appeared on the international scene early enough not to confront any real competition, the only other choice being the American version, which was too expensive," Hanin said.

Arianespace's newest rocket, the Ariane-5, can put two satellites totaling 5.9 tons into geostationary orbit. By 2002, capacity should reach 10 tons and by 2005, 11 tons, helping keep Arianespace competitive in the cutthroat international launch market where it leads currently with a two third share.

Arianespace's current launch backlog of 41 satellites represents more than $3.3 billion in business.

But Arianespace, Hanin says, cannot rest on its laurels.

Facing the emerging tough American competition of the low-cost -- including Boeing's new Delta-4 series, and the new Lockheed Martin Atlas-5 series set to fly within two years -- Arianespace engineers are already upgrading the heavy-lift Ariane-5 performance.

"Competition is getting keener all the time, and where launchers are concerned the competition is similar to aviation and automobiles," Hanin said. "Top Ariane management is under no illusions, which explains the introduction of the very latest Ariane 5. There can be no room for complacency."