A woman works on her computer near the logo of web search engine Google. The EU's competition watchdog on Tuesday approved 99 million euros (152 million dollars) of French state aid for a consortium to build a European rival to US internet search giant Google.

The EU's competition watchdog on Tuesday approved 99 million euros (152 million dollars) of French state aid for a consortium to build a European rival to US internet search giant Google.

The "Quaero" search engine project (Latin for "I search"), involving 23 companies led by French technology giant Thomson, has not yet got off the ground due to a lack of funding. Its estimated costs for the first five years are estimated at 199 million euros, half of which France -- which has championed the idea -- has agreed to fund.

Following an "in-depth examination," the European Commission decided that the Quaero project "brings positive externalities for the community as a whole."

However Quaero "is not spontaneously underpinned by the market owing to divergent interests within the consortium and to uncertainties regarding the project's chances of success," the EU's executive arm said in a statement.

Any resultant distortions in competition "should be limited," it added.

"We are confident that the positive contribution the programme will make to European research will outweigh any distortion of competition caused by the aid," EU Competition Commissioner Neelie Kroes said.

Thomson's targetted clients for Quaero are internet network operators, content distributors and film production studios. When developed, it will be available for personal computers, mobile phones, televisions and other platforms.

The project was unveiled with great fanfare in 2005 by then French President Jacques Chirac as a Franco-German attempt to come up with a competitor to Google, the US company which has become the pre-eminent web search engine.

However, in late 2006 some of the German developers left the project, deciding to work on a "complementary" search engine called "Theseus".

The Commission last year approved a German aid scheme for Theseus.

© 2008 AFP