BRUSSELS — China’s role in financing Europe’s Galileo satellite-navigation project has shrunk and will be limited almost exclusively to in-kind contributions by Chinese companies investing in ground hardware to be deployed in China, according to European government officials.

Gone is the idea that China would invest 200 million euros ($240 million) in cash in the Galileo Joint Undertaking, the body now managing the project on behalf of the European Commission and the European Space Agency (ESA). That investment would have given China as much as a 15 percent stake in the program, and a role as the third largest Galileo shareholder.

European government officials attending a Galileo investment forum here June 2 said China is now expected to make a cash payment of 5 million euros in the Galileo Joint Undertaking, for an equity stake of well under 1 percent.

China has agreed to make additional payments totaling 65 million euros over three years in Galileo development, but this money likely will be for ground installations in China that will serve to communicate with the 30-satellite Galileo constellation.

Once Galileo ownership is transferred to an industrial consortium, an event now planned for 2006, China will make a further investment equivalent to 130 million euros, officials said.

This will likely be in the form of developing Galileo terminals for the Chinese market.

"The Chinese have been reluctant to invest cash, and it’s true that a large cash investment would have made things complicated," said one European government official.

This official said Europe’s decision to exclude China from any involvement in Galileo’s encrypted security transmissions, known as the Public Regulated Service, made a deeper Chinese involvement difficult from the start.

In addition, U.S. technology-transfer rules and Europe’s own security concerns have all but excluded the use of Chinese rockets to launch the Galileo satellites.

But even a small Chinese investment in the Galileo Joint Undertaking has some European industry officials concerned that this will be the thin end of a wedge that China will use to gain access to Galileo’s intellectual property rights and compete with European companies in offering Galileo gear worldwide.

Patent and other rights to technologies developed for Galileo will be owned by the Galileo Joint Undertaking if they result from contracts paid for by the Joint Undertaking, according to Olivier Meert, head of administration and finance at the organization.

The protocols for China’s membership in the Galileo Joint Undertaking are completed and "it is now a matter of weeks" until the final documents are signed, said Olivier Onidi, head of the Galileo unit at the European Commission.

China’s entry into Galileo is important for two reasons — the size of the Chinese market, and the fact that China’s relations with Galileo will serve as a model for other nations’ involvement in the program.

Other nations’ involvement with Galileo will be patterned after the Chinese experience. Onidi said discussions are ongoing with Israel — which likely will be second after China in formally joining — as well as India, South Korea, Brazil and Mexico.

Onidi said that the imminent approval of a U.S.-European Union accord on Galileo-GPS interoperability will make it easier to negotiate a similar agreement with Russia.

Russian government authorities have insisted in recent months that their Glonass constellation of navigation satellites will remain operational.

Beyond saying that the Public Regulated Service is out of bounds, European government authorities have yet to clearly define what aspects of the Galileo program are open to participation by non-European entities — Chinese, Indian, American or otherwise.

ESA is creating a list of key Galileo technologies that will be off-limits to non-European contractors for the in-orbit validation phase of Galileo, which includes much of the ground installations and the launch of two experimental and four operational Galileo satellites.

However, the buildout of the full Galileo system is supposed to be financed mainly by the private-sector consortium that wins the Galileo concession.

The extent to which that consortium will be bound by the European Space Agency’s rules is unclear.