Sir Richard has set up The Spaceship Company and entered into agreement with aeronautical designer Burt Rutan and Microsoft co-founder Paul Allen, who backed Rutan’s first privately-financed SpaceShipOne rocket.

The sub-orbital flights will cost an estimated £115,000 (US$200,000, 166,454 euro) and last for approximately two hours, reaching heights of 62 miles.

Weightlessness will occur for five minutes of the flight and the return journey will include re-entry into the Earth’s atmosphere.

Branson’s Virgin Galactic will spend around £12.4m (US$21.5m, 17.9m euro) for use of the technology and a further £57.6m (US$100m, 83.2m euro) to build the five spacecraft – called SpaceShipTwo (SS2) – which will be capable of carrying up to seven passengers. Virgin Galactic will own the SS2 design and its launch system – White Knight Two – which is currently under development at Rutan’s Mojave Aerospace Ventures base in the US.

More than 28,000 people from 118 countries have already registered an interest in the space flight. To date, less than 600 people have visited space.

“We've always had a dream of developing a space tourism business and Paul Allen's vision, combined with Burt Rutan's technological brilliance, have brought that dream a step closer to reality,” said Branson.