The base is likely to be built on one of the Moon's poles and will serve as a science centre and possible stepping stone for manned missions to Mars.

The US has already said it plans to build a new lunar spacecraft to succeed the last Apollo mission in 1972.

Funds will be moved from space shuttle flights, due to be scrapped in 2010.

The structure of the base and the exact duties of the astronauts stationed there have not been decided.

Nor is it clear when the base will begin functioning.

Lunar outpost

"We're going for a base on the moon," Scott "Doc" Horowitz, Nasa's associate administrator for exploration, said.

The agency's deputy head, Shana Dale, is quoted by the Associated Press news agency as saying that the "fundamental lunar approach" will be very different to earlier Moon missions.

A lunar spacecraft has already been commissioned by Nasa

Nasa has elected to build a lunar outpost rather than operate brief trips to the satellite as it did in the 1960s.

Nasa is also expected to ask other countries - and businesses - to help it build the base.

The permanent base will be built near one of the two poles, as these are felt to have a moderate climate and more sunlight - essential if the base is to use solar energy.

"It's exciting," Shana Dale told the Reuters news agency. "We don't know as much about the polar regions."

According to Reuters, funds for building the lunar base will be diverted from the space shuttle programme, which is to be phased out by 2010.

After the Columbia space shuttle accident, US President George W Bush announced plans to send astronauts back to the moon by 2020.

Nasa announced in August that the Lockheed Martin Corporation will build the next US spaceship to take humans to the Moon.