Spaceport Cornwall has received a setback following Virgin Orbit announcing it is pausing operations on Thursday.

The US company, which is owned by Richard Branson, is expected to furlough most of its staff while it seeks new investment.

The decision follows the historic mission to deploy satellites into space from Spaceport Cornwall ending in failure on January 9 after a rocket fuel filter had become dislodged, causing one of the engines to overheat.

Virgin Orbit had pledged to return to Spaceport Cornwall as soon as later in the year to launch the first satellite into space from UK soil but that has now been put into serious doubt.

The company stated it was having “active discussions” about having another attempt to launched satellites into orbit from the facility.

Head of Spaceport Cornwall Melissa Thorpe previously stated the future of the facility does not just ride on Virgin Orbit as it is looking to attract other satellite launch companies as well.

Virgin Orbit chief executive Dan Hart told staff that the furlough would buy the company time to finalise a new investment plan.

He stated work had been put on hold with just a skeleton team remaining. The remainder of the workforce will be put on unpaid furlough, although employees can cash in annual leave.

A statement reads: "Virgin Orbit is initiating a company-wide operational pause, effective March 16, 2023, and anticipates providing an update on go-forward operations in the coming weeks."

The statement added that the investigation into the failure was 'nearly complete' and that "our next production rocket with the needed modification incorporated is in final stages of integration and test.”

British taxpayers' money was among the £20 million that has so far been thrown at the Spaceport Cornwall project, from a consortium including the local council, Virgin and the UK Space Agency. 

Cornwall Council is said to have paid Virgin Orbit more than £1million when the company used Spaceport Cornwall for its first European launch.

The mission had been billed as a major milestone for UK space, marking the birth of a home-grown launch industry. 

Spaceport Cornwall’s development was expected to create around 150 jobs and allow the UK to compete in the global market for deploying small satellites into Earth orbit — an industry forecast to be worth £3.9 billion by 2030 which Branson is hoping to tap into.

Branson put a further $5m into Virgin Orbit earlier this month, bringing his investments in the venture to $60m over the past four months.

Shares of Virgin Orbit fell about 33% in after-hours trading from its Wednesday close of $1.01 a share. The stock has slid steadily from its debut of near $10 a share in December 2021.