The bid is a natural for Branson, a high-school dropout turned flamboyant tycoon who has made several failed attempts to circle the world by hot-air balloon.
"It's just the kind of thing he absolutely loves, because it gets him maximum publicity," said David Learmount, operations and safety editor of Flight International magazine. "But the technology is there, it's plausible."
Branson, 54, announced a deal to license technology from Mojave Aerospace Ventures, the firm owned by Microsoft co-founder Paul Allen that bankrolled June's historic 90-minute space flight by the aircraft SpaceShipOne.
The Virgin craft will be based on Burt Rutan's design for SpaceShipOne, a stubby rocket-plane capable of carrying a pilot and two passengers.
"Virgin has been in talks with Paul Allen and Burt throughout this year, and in the early hours of Saturday signed a historical deal to license SpaceShipOne's technology to build the world's first private spaceship to go into commercial operating service," Branson told a news conference in London.
SpaceShipOne cracked the barrier to manned commercial space flight in June by taking a 90-minute flight almost 62 miles above Earth, just over the distance scientists widely consider to be the boundary of space.
Virgin said its agreement with Mojave Aerospace could be worth up to $25 million over the next 15 years, depending on the number of spaceships it builds.
The company said it planned to begin construction of the first vessel, VSS Enterprise, next year and to offer flights by 2007. It will invest about $108 million in spaceships and ground infrastructure for the venture, it said.
The new service will be called Virgin Galactic and expects to fly 3,000 new astronauts in its first five years. Fares will start at $208,000 for a two- to three-hour suborbital flight, including three days' training.
"I hope with the launch of Virgin Galactic and the building of our fleet of spacecraft that one day children around the world will wonder why we ever thought that space travel was a dream we read about in books," Branson said.
The only space tourists to date are U.S. businessman Dennis Tito and South African millionaire Mark Shuttleworth, who each paid $20 million for journeys to the International Space Station (news - web sites) on a Russian rocket.
The firm that arranged those trips, Space Adventures, also hopes to begin ticketed suborbital flights within a few years.
Branson, who began his career as a teenage newspaper publisher and record peddler, is now worth $2.2 billion, according to a Forbes magazine estimate.
His Virgin Group began as a record label, and now sells everything from soft drinks to bridal gowns, and runs a train service and mobile phone network.
It operates several airlines — British-based Virgin Atlantic and budget carriers Virgin Express in Europe and Virgin Blue in Australia — and plans to launch a low-budget U.S. carrier next year.
Branson has won extensive publicity with his aeronautical adventures.
He was the first person to cross both the Atlantic and Pacific oceans by hot-air balloon and made several unsuccessful attempts to be the first balloonist to circumnavigate the world without stopping.
Other feats include setting a trans-Atlantic speedboat record in 1986. In June, he made a 22-mile crossing of the English Channel by amphibious vessel in one hour, 40 minutes, 6 seconds, setting a new record.
On the Net:
Virgin Galactic, www.virgingalactic.com