USA: Network of satellites could begin to fail as early as 2010.

US government officials are concerned that the quality of the Global Positioning System (GPS) could begin to deteriorate as early as next year, resulting in regular blackouts and failures – or even dishing out inaccurate directions to millions of people worldwide.

The warning centres on the network of GPS satellites that constantly orbit the planet and beam signals back to the ground that help pinpoint your position on the Earth's surface.

The satellites are overseen by the US Air Force, which has maintained the GPS network since the early 1990s. According to a study by the US government accountability office (GAO), mismanagement and a lack of investment means that some of the crucial GPS satellites could begin to fail as early as next year.

"It is uncertain whether the Air Force will be able to acquire new satellites in time to maintain current GPS service without interruption," said the report, presented to Congress. "If not, some military operations and some civilian users could be adversely affected."

The report says that Air Force officials have failed to execute the necessary steps to keep the system running smoothly.

Although it is currently spending nearly $2bn (£1.3bn) to bring the 20-year-old system up to date, the GAO – which is the equivalent of Britain's National Audit Office – says that delays and overspending are putting the entire system in jeopardy.

"In recent years, the Air Force has struggled to successfully build GPS satellites within cost and schedule goals," said the report. "It encountered significant technical problems … [and] struggled with a different contractor."

The first replacement GPS satellite was due to launch at the beginning of 2007, but has been delayed several times and is now scheduled to go into orbit in November this year – almost three years late.

The impact on ordinary users could be significant, with millions of satnav users potential victims of bad directions or failed services. There would also be similar side effects on the military, which uses GPS for mapping, reconnaissance and for tracking hostile targets.

Some suggest that it could also have an impact on the proliferation of so-called location applications on mobile handsets – just as applications on the iPhone and other GPS-enabled smartphones are starting to get more popular.

The failings of GPS could also play into the hands of other countries – including opening the door to Galileo, the European-funded attempt to rival America's satellite navigation system, which is scheduled to start rolling out later next year.

Russia, India and China have developed their own satellite navigation technologies that are currently being expanded.