Completion of the James Webb Space Telescope in time for a 2018 launch will cost approximately $8.7 billion, American space agency NASA estimated.

The James Webb Space Telescope, which has been threatened with termination because of cost overruns, will already have spent $3.5 billion by the end of the fiscal year 2011. The space agency requires more funds to cover development and launch work as well as science costs.

NASA has announced the estimated costs of the project at a time when the Obama administration has asked federal agencies to plan for budgets which are at least 10 per cent below existing appropriation level.

The James Webb Space Telescope, which is considered to be a successor to the Hubble telescope, is slated to operate at the Earth-Sun L2 Lagrange point for around five years.

If the next-generation telescope actually makes its way into space, it will study dust clouds, planets and ancient galaxies spread across the near-to mid-infrared.

However, the fate of the James Webb is still unclear as the House Appropriations Committee recently drafted a 2012 budget that would put an end to funding for the observatory.