China has delayed the launch of its first space telescope, designed to detect black holes, by two years to 2012 for cost reasons, according to the Xinhua news agency.

China has staked a good deal of national pride in its space programme, which gained prominence when it put its first "taikonauts" in orbit in 2003.

Its space efforts have spurred rival India to expand its own space capabilities, while its successful downing of a defunct communications satellite in 2007 generated some concern among US security analysts.

The €103 million telescope launch had been scheduled for next year, but it was postponed for two years due to financial problems, Li Tipei, an academic with the Chinese Academy of Sciences and the chief scientist of the program, told Xinhua without elaborating.

The Hard X-ray Modulation Telescope will comprise three to four single telescopes equipped with hard X-ray detectors, instead of optical lenses, Mr Li said. It is being developed by CAS, the Ministry of Science and Tsinghua University, the nation's premier engineering school.

The one-ton space telescope and its carrier satellite is expected to enter orbit approximately 500 kilometres over the earth's surface, and circle the earth for four years.

China plans to land a vehicle on the moon in 2012.