"A successful launch has occurred at 7.53am Pacific time," said Robert Bigelow in a statement. "At approximately 3pm we will start to acquire information from the spacecraft as to its health."

Old design

The idea of using inflatable spacecraft is not new. The US space agency (Nasa) worked on its inflatable Transhab module for many years.

The design was tested at the agency's Johnson Space Center and was mooted as an alternative to the "hard" habitation modules used for the International Space station (ISS).

Nasa was also exploring the concept for use on the Moon and Mars.

Inflatable spacecraft are attractive because they take up less space on their launch vehicle than solid components and therefore cost less to place into orbit.

Budget cuts by the US Congress ended the Transhab programme in 2001, and Bigelow acquired the patents and rights to the design soon after.

Since then, the private company, set up in 1999, has been evolving Nasa's design.

Space debris

The first Genesis craft is 4.5m (15ft) long and has a diameter of 2.4m (8ft), one-third of the size of a full-scale craft.

It is built around a rigid central core and two solid bulkheads. The inflatable walls are composed of a range of materials including Kevlar, often used in bullet-proof vests, and a fibrous textile called Vectran.

The walls are designed to be airtight and tough, to withstand the impact of space debris and small meteorites.

On a full-scale module, each wall would be 40cm (16 inches) thick.

"It's extremely durable and resistant to any puncture or penetration," said Mr Bigelow.

To launch the module into space, the craft was carefully folded so that it could be placed into the fairing of the rocket.

It was launched aboard a Dnepr rocket from the Dombarovsky missile base in Siberia.

Scientists and engineers on the ground in Arlington, Virginia, US, have confirmed that it has reached an orbit of 550km (340 miles) and were said to be waiting for a signal confirming that all systems are healthy.

The goal of the mission is to test the inflatable technology.

If a signal is received, scientists will start the inflation process.

First, solar arrays, necessary to power the onboard telemetry, will unfold before compressed air tanks push the folded structure into shape. The process will take several days.

As the craft inflates, other systems onboard, including 13 cameras and lighting, will also switch on.

The cameras will beam pictures and video of the craft back to Earth and also monitor the module's living inhabitants, which include cockroaches and Mexican jumping bean moths.

Commercial space

The successful launch is the first of many planned by Bigelow Aerospace. Two more launches are planned within the next 12 months.

They will carry other inhabitants including ant colonies and scorpions, as well as personal objects, such as photographs, which people can pay the company to put into space.

Eventually, the company hopes to build a full-scale space hotel, dubbed Nautilus, which will link a series of modules together like a string of sausages. "We intend to have full-scale modules ready to deploy in five years," said Mr Bigelow.

However, according to some space experts, Bigelow's venture will only succeed if others can provide the transport to get people into space.

"The ultimate long-term success of Bigelow's business rests on lowering the cost of space access," said David Salt, a senior consultant and expert on private spaceflight at Vega, an aerospace consultancy.

As a result, Mr Bigelow is offering a $50m prize to anyone that can demonstrate a craft capable of carrying five people to a height of 400km (250 miles) before 2010.

"America's Space Prize", as it is known, is one of many cash rewards aimed at encouraging private companies to kick-start the commercialisation of space.

Pilot Brian Binnie sped into the record books in 2005 when he piloted the rocket plane SpaceShipOne to 100km twice in a week.

The feat won the $10m Ansari X-Prize for the plane's design team, led by Burt Rutan.

Virgin boss Sir Richard Branson has since launched his commercial Virgin Galactic service that will eventually use spaceliners based on the SpaceShipOne concept.

"Bigelow is one of a growing number of 'NewSpace' entrepreneurial ventures aiming to establish a sustainable and evolving human presence in space, driven by the force of commercial enterprise rather than government programmes," said Mr Salt.

"The goal and commitment of Bigelow and others is now being taken very seriously."