The Isle of Man is celebrating victory in its battle with Bermuda for a lucrative satellite slot ? but Bermuda says it has jumped the gun.

Yesterday an article on the Isle of Man Online website said a ?500,000 fighting fund given to its satellite industry will be handed back to its parliament after an Ofcom report on the matter favoured the Isle of Man's priority filing status.

Ofcom represents the UK and British Overseas Territories in the International Telecommunications Union (ITU) and decides whether to submit applications for satellite network filings to the ITU for registration.

The Isle of Man was competing with Bermuda over a particular slot serving the North American market worth up to $850 million a year in revenue.

Isle of Man Online said that island's initial application for the slot in 2002 was followed by one from Bermuda for a very similar frequency on the radio spectrum that would have caused interference.

The Isle of Man's Communications Commission was granted ?500,000 of legal expenses by the Isle of Man Parliament to allow it to argue against conflicting filings.

A representation to Ofcom resulted in a consultative document recommending that, in the result of conflicting filings, the party making the first application would have priority, meaning that legal action was not required.

However a statement by the Telecommunications Ministry last night said: "Contrary to a story appearing in the Isle of Man newspaper that it has won a satellite battle against Bermuda, the Government of Bermuda says that the matter has not yet been settled because discussions are ongoing with the relative parties."

The statement said Bermuda's position received a boost on Friday when Ofcom filed Bermuda's first satellite network proposal with the International Telecommunication Union (ITU) in Geneva.

Government says that Bermuda is still in the running because Ofcom has allowed Bermuda to file a late claim to hold on to the satellite slot that serves the North American market.

A Government spokesman added: "We are confident that Bermuda is in a strong position to retain the satellite slot that was originally assigned to us back in 1983 because Bermuda has strong contenders who are each capable of putting up a satellite."

Ian Jarritt, finance director of Mansat, the Isle of Man's satellite body, said: 'Their filing was subsequent to ours.

"As long as we have the priority then their satellite is not really a practical proposition. If for any reason the Isle of Man satellites do not progress they would be first reserve."

Anthony Hewitt, director of the Isle of Man's Communications Commission, said: "The presentation we were able to put together was supported by the governments of Jersey and Gibraltar.

"Ofcom has come up with a decision which does allow conflicting filings from Bermuda, but it goes a long way in the detail to solidifying the status of our position.

"Mansat has got clients of international standing, this is the strength of the Isle of Man, we are growing a space industry that is real, not just speculative paper filings.

"Bermuda had seen how much success the Isle of Man and Gibraltar were having and was looking to jump on the bandwagon.'

The Ofcom consultation document, released last month, said "paper satellites" block orbital slots resulting in under-utilisation of valuable orbital resource.

"It is incumbent on the administration to satisfy itself that there is a realistic likelihood that the satellite will in fact be launched and will not block a valuable orbital location and frequency assignment."