The race is on to build the first "space elevator' - long dismissed as science fiction - to carry people and materials into orbit along a cable thousands of miles long.

In a significant step, American aviation regulators have just given permission for the opening trials of a prototype, while a competition to be launched next month follows in the wake of the $10 million (£5.6 million) "X Prize'', which led to the first privately developed craft leaving the Earth's atmosphere, briefly, last year.

Supporters of the elevator concept promise a future in space that is both cheap and accessible, and contrast it to Nasa's announcement last week that it will be relying on 40-year-old technology from the Apollo programme for its $105 billion plan to return to the Moon by 2018. The companies behind the space elevator say they will be able to lift material into orbit for as little as $400 a pound, compared with $20,000 a pound using existing rockets.

That would open up the possibility of tourists visiting a sky hotel in stationary orbit 22,000 miles above the Earth, with a view previously enjoyed only by astronauts.

It would also allow for far cheaper travel to the Moon and other planets within the solar system, since most of the energy required by rockets is used simply to escape Earth's gravity.

Russian scientists first envisaged a fixed link to space, and the idea was popularised by the British sci-fi writer and vision-ary, Arthur C Clarke, in his 1978 novel, The Fountains of Paradise.

The theory behind the space elevator is deceptively simple. With a base station on Earth and an orbiting satellite, solar-powered "climbers'', each carrying up to 20 tons, would crawl up a single cable into space over several days. The cable would be held up by the rotation of a 600-ton satellite counter-weight, much like a heavy object at the end of a spinning rope.

Until recently, the concept seemed doomed by the technology available, not least finding a material strong enough to make such a long cable, able to withstand extreme temperatures.

Scientists now believe that a material known as carbon nanotubes could be bound together to make a ribbon, rather than a cable, three-feet across but just half the width of a pencil.

Nanotubes, which are microscopic cylinders of carbon, are currently being developed by a number of companies, including GE and IBM. In one experiment, a sheet of nanotubes one-thousandth the thickness of a human hair could support 50,000 times its own mass.

"Elevator 2010'', which is to be launched on October 21 in California, will offer an annual first prize of $50,000 for the best design for both a tether - or ribbon - and a lightweight climber. It is being run by the Spaceward Foundation, which promotes space exploration, and has the backing of Nasa, which has given $400,000 in prize money. At least 10 teams will take part in the first contest.

Brad Edwards, a board member of the foundation, says the initial development could be ready "in the next couple of years", with the elevator itself being built in another decade.

"We are talking about getting this up in about 15 years,'' Dr Edwards predicted.

A rival design is being produced in Seattle by the LiftPort Group, which is counting down to a first voyage into space on April 12, 2018. The Federal Aviation Authority last week cleared an experiment by LiftPort that would use a mile-long tether attached to a balloon, something the company calls: "A critical step.''

Fears that an aircraft would crash into the elevator ribbon is just one concern. Space debris and terrorism are others.

Developers propose a floating base station near the equator, more than 400 miles from the nearest flight path.

Should the 800-ton ribbon break, it would either fly into space or fall back to the ground in fragments that would, in theory, hit no harder than a sheet of paper.