"We will build new ships to carry man forward into the universe, to gain a new foothold on the moon and prepare for new journeys to the worlds beyond our own," Bush said at the National Aeronautics and Space Administration.

The announcement came less than a year after the breakup of the space shuttle Columbia, which killed seven astronauts last February.

Bush said the remaining space shuttles would be retired in 2010.

The new plan would be "a journey, not a race", said Bush, calling on other nations to join the US effort.

It could also help extend US military supremacy in space at a time when China is planning lunar exploration missions.

"You always want the high ground," said Republican Senator Sam Brownback of Kansas, chairman of the Senate subcommittee on science, technology and space.

Such thinking echoed a key aim of the 1960s American space race against the Soviet Union.

Alice Slater, head of the environmental advocacy group Global Resource Action Centre for the Environment, said the Bush plan "will create a new arms race to the heavens".

US security officials have said military dominance in space is essential, especially after China's first manned space flight last year.

In Beijing, the Xinhua news agency reported that China planned to launch 10 satellites this year and prepare for its second manned space flight and a lunar probe that would go where no Chinese spaceship had gone before.

China has already announced plans to launch a lunar probe programme this year, which includes a lunar satellite by 2007.

"That will be followed by the landing of an unmanned vehicle on the Moon by 2010 and collecting samples of lunar soil by 2020," Xinhua said.

Moscow might also send a manned mission to Mars, the Itar-Tass news agency reported.

"Technically, the first flight to Mars may be made in 2014," the agency quoted Leonid Gorshkov, designer at the space rocket corporation Energia, as saying.

"It will take about US$15 billion ($22 billion) to do it. American specialists estimate their project at US$150 billion."

Bush's announcement was the latest ambitious policy move designed to portray him as a leader who deserves re-election in November.

He wants to avoid the fate of his father, George Bush, who once famously remarked that he lacked vision and was defeated in his re-election bid in 1992 by Bill Clinton.

Analysts said Bush might not win the backing of Congress for his measure this year, but it could be a major issue in 2005 if he is re-elected.

Bush proposed landing an unmanned spacecraft on the moon as early as 2008.

Humans would return to the moon by 2020 for the first time since December 1972. The moon would serve as a stepping stone to an eventual manned mission to Mars.

To pay for it, Bush proposed a five-year, US$1 billion increase in Nasa's budget, now about US$15 billion.

Another US$11 billion over five years would be re-allocated from elsewhere in Nasa's budget.

Nasa would retire the space shuttle after completion of the International Space Station, which Bush said would focus on studying the impact of space travel on humans.

The new space drive would slake a human "thirst for knowledge" and yield technological breakthroughs, he said.

The moon also had "abundant resources" that could be exploited for potential uses such as rocket fuel.

Critics say Bush's plan could cost hundreds of billions of dollars at a time when the federal budget deficit is expected to top US$500 billion.

"I think it's just a total fiscal absurdity. Bush has been spending money like we've got money to burn, and we don't," said Stephen Moore, president of the Club for Growth, a politically powerful conservative group.

Democrats said the Government should focus on bolstering domestic programmes.

"We should not be going hundreds of millions of miles away on a costly new mission when we have limited resources," said Democratic presidential candidate Senator Joseph Lieberman of Connecticut.

Nasa administrator Sean O'Keefe compared the effect on the average taxpayer to "the cost of a monthly cable television payment."

Officials said that would be the equivalent of about US$55 to US$60 a year for the taxpayer.

Bush named Pete Aldridge, a former Air Force Secretary and chief Pentagon weapons buyer and now a board member of defence contractor Lockheed Martin, to head a commission to advise the Government on implementing the new space programme.