The foundation whose $10 million prize spurred privately funded rocketeers to send a small piloted craft to the cusp of space in 2004 has issued a new challenge: an unmanned moon shot.

With the audacious new contest comes a much bigger prize, as much as $25 million, paid for by Google, the ubiquitous Internet company.

The “Google Lunar X Prize” was announced Thursday in Los Angeles at Wired Magazines NextFest. The contest calls for entrants to land a rover on the moon that will be able to travel at least 500 meters, or 1,640 feet, and send high-resolution video, still images and other data back home.

The X Prize Foundation saw the new contest as one of “the grand challenges of our time that we can use to move people forward,” said Peter Diamandis, foundation chairman and chief executive.

The prize for reaching the moon and completing the tasks of roving and sending video and data will bring the winner $20 million, according to the contest rules; an additional $5 million would be awarded for additional tasks that include roving more than 5,000 meters or sending back images of artifacts like lunar landers from the Apollo program.

The $20 million grand prize will be available until Dec. 31, 2012, and then will shrink to $15 million for two years. The contest would be likely to end after that time, although Google and the foundation might be able to extend it.

The new contest follows the path of the original Ansari X Prize, worth $10 million, which was won by SpaceShipOne, a manned spacecraft designed by Burt Rutans Scaled Composites and funded by Paul Allen, a co-founder of Microsoft.

That prize was paid for through an insurance policy secured by Anousheh Ansari, a telecommunications entrepreneur in Texas and a board member of the X Prize Foundation who has since flown aboard the International Space Station. Burt Rutan is designing a craft called SpaceShipTwo that will be used by Richard Bransons space tourism company, Virgin Galactic.

The Ansari X Prize was based on earlier contests that spurred exploration and development of previous generations of aircraft, like the $25,000 Orteig Prize that led to the first solo trans-Atlantic flight by Charles Lindbergh in the Spirit of St. Louis in 1927.

Competitions, the logic goes, build excitement for new technologies and bring varied talent and creativity to bear on difficult problems from many approaches.

The new X Prize, Diamandis said, grew out of research performed last year for NASA as a contest that the U.S. space agency would sponsor. The research suggested that six or seven credible contenders could be expected to try for the prize, but NASA ultimately backed away from financing the project, Diamandis said.

“We were left with a very strong concept, but without a funder,” he said.

In March, Diamandis pitched the idea to the Google co-founder Larry Page, who is on the X Prize Foundation board.

Pages reply provided a stark distinction between the ways of government and of billionaire entrepreneurs.

“Sounds like a lot of fun,” he said, according to Diamandis. The multimillion-dollar project, Page said, would be “doable,” but his Google co-founder, Sergey Brin, would have to sign on as well. And he did.

In a video statement to coincide with the announcement, Brin said that “we believe in the entrepreneurial spirit to accomplish the most ambitious tasks.”

NASA has announced plans to return astronauts to the moon as early as 2020. But without the need to keep humans alive or to make a return trip, the X Prize trips would be comparatively simpler. In fact, getting to the moon could be the easier part, since launch vehicles that could reach the moon are already available from the Russian and U.S. governments, and potentially could be produced by other countries and private companies.

A number of successful entrepreneurs from the world of computing and the Internet, like Allen, have pursued childhood fascinations with space through efforts to create real spacecraft. Elon Musk, a founder of PayPal, has developed rockets through his company, Space Exploration Technologies, and Jeffrey Bezos, the founder of Amazon.com, is developing rockets at a facility he owns in West Texas.

Robert Bigelow, who has made his fortune in hotels, is developing a space transportation system and a space station that could be used as an orbiting hotel or research base.

Musk, who has a development contract with NASA that could lead to a craft to carry astronauts and cargo to the International Space Station, serves on the X Prize Foundation board and has offered contest participants reduced prices on its Falcon vehicles to make the 248,000-mile, or 396,400-kilometer, trip.

Police in southern Spain arrested two people yesterday, apparently in connection with the investigation into the missing British toddler Madeleine McCann, it was reported last night.

According to the Spanish newspaper El Paнs, an Italian man was detained by specialist anti-kidnap police in the town of Sotogrande, close to Gibraltar, early yesterday. The paper said the man was being held on suspicion of a possible extortion plot against the family of the child, who disappeared on May 3 from a holiday apartment in the Portuguese resort of Praia da Luz.

The suspect was apparently arrested after an international warrant was issued by the French authorities, but Spanish police said: “We are investigating whether this is linked to Madeleine’s disappearance.”

The paper said that the man had already tried to blackmail the McCann family, and quoted other sources suggesting that he had been sought by French police in connection with a case of child abuse.

French police refused to comment on the reports, referring inquiries back to Spanish and Italian authorities.

Chief Inspector Olegario Sousa, the Portuguese officer leading the investigation in the Algarve, told the Guardian that two people were arrested in the operation. Portuguese officers had been called in by their Spanish counterparts to assist in an operation in Spain that began early yesterday, he said, adding that he could not yet confirm whether the arrests were directly linked with Madeleine’s disappearance. Other sources suggested that the second person arrested was a Portuguese woman, but Mr Sousa would not confirm this.

The reported arrests, 56 days after Madeleine’s disappearance, were the most significant breakthrough in some weeks in the kidnap investigation. The only other person to have been arrested in connection with the case is Robert Murat, a British man who lives in Praia da Luz. Mr Murat’s house was searched and he was questioned at length but he was not charged.

Madeleine was four days short of her fourth birthday when she vanished from the bedroom of her parents’ holiday apartment while they ate dinner in a nearby restaurant. She was apparently taken from her bedroom while her two-year-old twin siblings slept beside her.

Despite a huge search in the nearby area during the days following the disappearance, and an energetic publicity operation which has seen posters of the missing child distributed throughout Europe and north Africa, there have been no confirmed sightings of Madeleine since she disappeared.

Kate and Gerry McCann, her parents, went on a tour of European and north African cities this month in an attempt to widen the appeal for information, visiting Rome, Lisbon, Madrid, Berlin, Amsterdam and Rabat, but the breakthrough for which the family longs remains elusive.

Last night John McCann, Gerry’s brother, said he had not yet been given information relating to the arrest.

“We have no comment to make, because we know no more than we have seen on the news,” he said. Madeleine’s great-uncle, Brian Kennedy, told Sky News: “We are trying not to get our hopes up too much because they so frequently get dashed.”

Mr and Mrs McCann, from Rothley in Leicestershire, have remained in Praia da Luz since their daughter vanished and have vowed not to return to the UK until she is found.

THE UK’s biggest mortgage lender announced today it was raising its mortgage rates, with analysts warning others would follow suit.

Halifax, which accounts for one in every five mortgages in the UK, is increasing the rate charged on 20 of its tracker mortgages for new customers by between 0.1 per cent and 0.2 per cent from tomorrow.

The move comes the day after Britain’s second biggest lender Abbey announced it was increasing its tracker mortgage rates by the same amount for new customers from today.

Paul Fincham, of Halifax, said: “It is a combination of things. Pricing has changed in the markets. Also we have seen other lenders move, so we needed to adjust our rates.” The hikes, part of the ongoing response to volatility in the global credit markets, come as Chancellor Alistair Darling today urged a more cautious approach to lending.

Standard Life is due to increase its rates next week, although it has not yet said by how much, while specialist lender Capital Home Loans is also raising its rates.

Commentators warned that now the UK’s two biggest lenders had hiked their rates, other banks and building societies were likely to follow suit quickly.

Ray Boulger, senior technical manager at independent mortgage experts John Charcol, said there was likely to by an “acceleration” in the trend.

He said: “This gives some comfort to other lenders who are thinking of moving and didn’t want to be first. The longer that lenders think this [volatility] will go on, the more reason there is for them to put their tracker rates up.” He also warned some lenders might also increase their standard variable rates, which would affect existing customers who were on discount mortgages.

Banks are raising their rates in response to an increase in the inter-bank lending rate.

It comes as a result of the crisis in the US sub-prime mortgage market, which lends money to people who would be turned down by mainstream banks. High levels of defaults on these loans, which some claim should never have been advanced in the first place, have rocked global credit markets, as the loans are packaged up and sold on to investors to spread the risk.

The increase in mortgage rates in this country is the first sign that the problems which began in the US are hitting UK homeowners directly. Meanwhile, the Royal Institution of Chartered Surveyors warned that house prices fell during August for the first time in more than two years.

At the same time, it said inquiries from new buyers fell for the ninth month in a row and at their fastest pace for three years, as potential buyers waited to see what impact recent rises in the official cost of borrowing would have on the property market.

Edinburgh South MP Mr Darling urged banks to adopt a more cautious approach to lending, signalling Treasury concern over the impact of years of easy credit.

He added people on both sides needed to “think long and hard” about the risks involved, and suggested a return to “good old-fashioned banking” would be helpful.