The remote A'Mhoine peninsula in Sutherland will host satellite and vertical rocket launches, after beating off competition from other sites to host the UK's first spaceport – bringing with it the potential for tourist trips to space.

The decision, announced by Business Secretary Greg Clark and the UK space agency saw the Sutherland site overcome competition from Prestwick, Unst on Sheltland, Newquay in Cornwall and a number of other coastal locations.

The spaceport is expected to bring with it a £4bn boost to the UK economy and great opportunities for the space research community.

But it could ultimately lead to commercial passenger space flights. In January Richard Branson said he hoped his Virgin Galactic would be one of the main operators at any UK spaceport.

"We are a contender to operate Virgin Galactic out of the British spaceport once it’s chosen,” he said. “I think initially it will be for people going into space and coming back to that spaceport, but, in time, the aim is to go point-to-point.”

The UK Space Agency has also said vertical rocket and satellite launches from A'Mhoine will pave the way for spaceflights.

The agency said the site, between Tongue and Durness, was chosen as it is the best place in the UK to reach highly sought-after satellite orbits with vertically launched rockets.

Highlands and Islands Enterprise (HIE) will receive £2.5 million in UK Government funding to help develop the spaceport which could be operational by the early 2020s.

There was a consolation prize for Prestwick and some of the other shortlisted sites as the Government also announced a new £2 million development fund for horizontal launch spaceports at Prestwick, Newquay and Snowdonia, subject to a successful business case. With the aid of the cash they are being encouraged to progress their ambitions for sub-orbital flight, satellite launches and spaceplanes.

Agency chief executive Graham Turnock said the spaceport grant would "help kick-start an exciting new era for the UK space industry".

Business Secretary Greg Clark said: "As a nation of innovators and entrepreneurs, we want Britain to be the first place in mainland Europe to launch satellites as part of our Industrial Strategy.

"The UK's thriving space industry, research community and aerospace supply chain put the UK in a leading position to develop both vertical and horizontal launch sites."

The Herald:

The consortium behind the Sutherland spaceport proposal includes US aerospace firm Lockheed Martin.

HIE chief executive Charlotte Wright said: "The decision to support the UK's first spaceport in Sutherland is tremendous news for our region and for Scotland as a whole.

"The international space sector is growing and we want to ensure the region is ready to reap the economic benefits that will be generated from this fantastic opportunity."