Sir Richard Branson’s bid to take paying customers into space has suffered a major blow, after a test flight of a Virgin Galactic spacecraft crashed in southern California, with early reports suggesting one pilot had been killed and another seriously injured.

SpaceShipTwo, the flagship of the British billionaire’s commercial spaceflight venture, took off on a test flight yesterday morning from the Virgin Galactic Base, at the Mojave Air and Space Port, a little under 100 miles north-east of Los Angeles.

The craft is designed to be carried aloft by a partner plane, called WhiteKnightTwo, to an altitude of 50,000ft, at which point it peels away and fires its rockets to fly on into sub-orbit alone. Witnesses on the ground said shortly after detaching from WhiteKnightTwo, a little past 10am, SpaceShipTwo suffered a mid-air explosion, which Virgin described as an “in-flight anomaly”.

Two test pilots equipped with parachutes were thought to be on board the spacecraft, and local authorities said one had died, while the other managed to eject from the plane and was transported to hospital with “moderate to major” injuries.

The incident puts a large dent in the ambitions of Sir Richard and Virgin Galactic, and could prove to be a public-relations disaster for the nascent space-tourism industry as a whole. Virgin Galactic is one of the leading firms in the commercial space race. Yet the launch date for Virgin’s first commercial flight has been repeatedly put back, with some experts sceptical about its chances of launching at all.

In pictures: Virgin Galactic space rocket crash Show all 9 1 /9 In pictures: Virgin Galactic space rocket crash In pictures: Virgin Galactic space rocket crash Virgin Galactic space rocket A three-image combination shows the Virgin Galactic SpaceShipTwo rocket separating from the carrier aircraft, left, before it exploded, right, during a test flight on 31 October 2014 AP Photo/Kenneth Brown In pictures: Virgin Galactic space rocket crash Virgin Galactic space rocket Sir Richard Branson, founder of Virgin Galactic, with a scale model of the Spaceship Two attached to the White Knight carrier aircraft in this January 2008 photograph STAN HONDA/AFP/Getty Images In pictures: Virgin Galactic space rocket crash Virgin Galactic space rocket The Virgin Galactic SpaceShipTwo rocket explodes in the air during a test flight AP In pictures: Virgin Galactic space rocket crash Virgin Galactic space rocket Wreckage from Virgin Galactic's SpaceShipTwo Reuters In pictures: Virgin Galactic space rocket crash galactic-debris-reuters.jpg A piece of debris after the crash of Virgin Galactic's SpaceShipTwo near Cantil, California REUTERS/Lucy Nicholson In pictures: Virgin Galactic space rocket crash Virgin Galactic space rocket The suborbital passenger spaceship being developed by Richard Branson's Virgin Galactic crashed during a test flight on Friday at the Mojave Air and Space Port in California Reuters In pictures: Virgin Galactic space rocket crash Virgin Galactic space rocket Police officers stand near wreckage from Virgin Galactic's SpaceShipTwo Reuters In pictures: Virgin Galactic space rocket crash Virgin Galactic space rocket The wreckage of what is believed to be SpaceShipTwo in Southern California's Mojave Desert AP In pictures: Virgin Galactic space rocket crash Virgin Galactic space rocket A rescue crew carries a person on a stretcher to a waiting helicopter near the scene of a crash of the SpaceShipTwo in Southern California's Mojave Desert AP

More than 800 prospective space tourists have already parted with around $200,000 (£125,000) for the privilege of being on an early Virgin Galactic flight; the two-hour trips will include five minutes of weightlessness. The passenger list reportedly includes Justin Bieber, Angelina Jolie and Professor Stephen Hawking. Until the accident, Sir Richard and his children were expected to be aboard SpaceShipTwo’s first commercial flight sometime in 2015. Sir Richard tweeted yesterday, “Thoughts with all @virgingalactic & Scaled. I’m flying to Mojave immediately to be with the team”.

Earlier this year, Virgin Galactic unveiled a partnership with Nasa to undertake a commercial research flight on the spacecraft, which completed its first powered test flight in April 2013. As part of the long-running test programme, the craft’s flights had been edging ever closer to the fringes of space. Before yesterday’s crash, the firm suggested SpaceShipTwo might make its first trip to an outer-space altitude – 62 miles – before the end of this year.

Yesterday’s flight, conducted by Virgin Galactic’s aerospace partner Scaled Composites, was SpaceShipTwo’s 55th flight, and the 35th time it had detached from its carrier plane to fly alone. However, it was only the fourth time the craft had fired its rockets – the first such test since January. In the meantime, engineers had altered the make-up of its rocket fuel, from a rubber-based to a plastic-based compound, in a bid to improve the performance.

Police officers stand near wreckage from Virgin Galactic's SpaceShipTwo (Reuters)

The last time SpaceShipTwo completed a successful test flight was on 7 October, when it glided unpowered back to the Mojave Space Port from 50,000ft. According to NBC News, yesterday’s flight faced a delay of at least three hours as the Virgin ground team made sure the weather was suitable for a test flight. The twin craft were finally cleared for take-off at 9.19am. WhiteKnightTwo then took 45 minutes to carry SpaceShipTwo to 50,000ft before the two planes split and SpaceShipTwo fired its rockets, apparently with fatal results.

“Virgin Galactic’s partner Scaled Composites conducted a test flight of SpaceShipTwo earlier today,” said a statement on the Virgin Galactic website. “During the test, the vehicle suffered a serious anomaly resulting in the loss of the vehicle. Our first concern is the status of the pilots, which is unknown at this time.”