The Isle of Man is preparing a fighting fund to battle with Bermuda over the rights to a lucrative satellite slot.

The dispute is being moderated by the UK?s Office of Communications (Ofcom) but the Isle of Man?s Communications Commission will this week be asking its parliament for ?500,000 ?to promote and defend the space industry in the Isle of Man?, according to an article on the Isle of Man Online web-site.

It is believed that the money will cover potential legal costs if a star-war starts between Bermuda and the island in the Irish Sea, 83 miles from Liverpool and 90 miles from Belfast.

Its government said the satellite slot being contested is one of its most important.

Bermuda has attempted to modify one of the three slots allocated to the Island by the United Nations in 1983. The Isle of Man has since accused Bermuda of seeking to undermine its satellite rights to service the North American market.

It claims an Isle of Man based firm ? Mansat ? filed these rights two years ago.

The island?s Chief Minister, Donald Gelling, told the Isle of Man parliament last week that business related to space and satellite activity is a multimillion-pound industry for the Isle of Man and the potential for the future is huge.

He said: ?The island has already introduced a zero income tax rate for this type of business and is serious about developing its position as a significant player in the field.

?We have no choice but to resist this late attempt by Bermuda to muscle in on our slot if we are to protect the credibility of the island and its space industry.?

In a release this month, the Bermuda Government said the Isle of Man has objected to its attempts to modify one of Bermuda?s three slots and they are in ongoing discussions with the UK Government, including the Foreign and Commonwealth Office and Ofcom.

Government also said the Isle of Man is seeking to develop a slot which is nearby to, and overlaps with, the Bermudian slot to be modified and could net an annual revenue of $850 million a year.

However, the high maintenance costs should result in typical annual profits of closer to $5 million.

The Isle of Man?s government has targeted the space industry as a key growth area.

In its last budget, it introduced zero corporate tax rates for companies which produce components for satellites and other space-related products, in advance of its 2006 target for zero company tax.

The commercial space industry had a turnover of $105 billion in 2002 so if the island can attract even a fraction of that the economic benefits for their economy would be significant.

And the island has already established a track record in the space industry through leading companies such as Sea Launch, Inmarsat and Loral.

Its government has worked closely with ManSat in its applications to the International Telecommunications Union for the geostationary orbital slots.

Ian Jarritt, chairman of ManStar, the Onchan-based subsidiary of ManSat, said the Isle of Man is ideally situated to access satellites over the Atlantic and Indian oceans serving a significant part of the global telecoms market.

Government?s Department of Communication and Information was unable to comment on the potential legal battle by presstime last night.