Plans for a European base on the moon have taken a major step forward.

The European Space Agency revealed it has signed up rocket maker ArianeGroup to develop plans for a moon base that could be used to mine material from the lunar surface.

The project will 'examine the possibility of going to the Moon before 2025 and starting to work there' - and could trigger a new space race as countries rush to harness lunar resources.

The one-year contract aims to eventually mine regolith on the lunar surface. 

 'As ESA and other agencies prepare to send humans back to the Moon – this time to stay – technologies that make use of materials available in space (in-situ resource utilisation) are seen as key to sustainability, and a stepping stone in humankind's adventure to Mars and farther into the Solar System,' the space agency said.  

'In the longer term, resources in space may even be used on Earth.'