Scotland is set for a space race to see whether the UK’s first spaceport will be in Shetland or the Highlands.

The most northerly outpost of Britain, Unst in the Shetland Isles, is anticipating a tourism boom as plans have been unveiled for a privately funded project to build a satellite launch site.

More than £2million has been poured into the proposals by investors but planning permission has yet to be submitted to the Shetland Islands Council.

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In Sutherland, Caithness, the UK Space Agency plans to build a vertical launch site, with plans submitted to Highland Council on February 7 and construction is expected to start this year.

However, the £17.3 million Space Hub Sutherland will not cater to ‘space tourists’ - unlike the Shetland Space Centre.

A report commissioned by the UK Space Agency had identified Unst as the best spot in Britain for launching small satellites into space.

Crofters on the tiny island have welcomed plans for the Shetland Space Centre and have agreed to lease land in a bid to make it happen.

And the local authority welcomed the £2,050,000 investment from private equity firm Leonne International.

Chair of the council’s development committee, Alastair Cooper, said: “This announcement of private equity funding for the Shetland Space Centre is positive news.

“The council is committed to supporting local economic opportunities and we hope to maximise the benefit for Unst and Shetland as this project develops. With a wealth of industrial experience in Shetland, there is great potential for the existing business sector to help this pioneering space industry to grow.

“The space sector is a key area for development and diversification in our future economy.

“Space services will provide opportunities for training and employment and help to increase the active working population in the isles.

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“I particularly welcome the commitment to environmental monitoring, which will gather data to ensure the protection of the natural environment.”

CEO of Shetland Space Centre, Frank Strang, said: “Importantly, the investment enables us to proceed with the first stages of gaining the necessary permissions and licences required to operate the facility and get on with building our launch site and ground station.

“Furthermore, the funding validates what we and, crucially, the wider space industry has been saying for several years now – that Shetland is absolutely the right location for kick-starting the UK’s entry into this rapidly growing market.”