The United States has launched a national security investigation into the proposed sale of a stake in Sir Richard Branson’s Virgin Galactic space company to Arab investors.

The Committee on Foreign Investments in the United States (CFIUS) is understood to have begun a review of Sir Richard’s sale of a 32 per cent stake in Galactic to Aabar Investments for $280 million (£170 million). The move has caused alarm in banking circles in Abu Dhabi and could raise tensions between the US and the Gulf.

Bank insiders told The Times that there was a growing concern locally that the deal could be amended or even blocked because Aabar, Sir Richard’s proposed partner, is ultimately controlled by Sheikh Mansour bin Zayed al-Nahyan, a member of the Abu Dhabi ruling family. Skeikh Mansour, a half-brother of the ruler of Abu Dhabi, also bought Manchester City Football Club last year for £200 million.

CFIUS, part of the US Treasury Department, reviews all acquisitions by foreigners in companies deemed important to national security. The committee, chaired by the Secretary of Treasury, includes representatives of Government departments including Defence and Homeland Security.

Virgin said that it had been ordered to refile its application and provide more detail because of the complex nature of the investment proposal.

CFIUS takes 30 days to review a case and either approves it or moves on to a 45-day statutory investigation. It is unclear what stage Virgin has reached as the committee can demand further information at any time.

Only about 2 per cent of cases are referred for a full-blown investigation, legal sources said. For example, two years ago when BAE Systems bought Armor Holdings, which makes armoured vehicles for the US Army, the deal was waved through after only a review.

Will Whitehorn, president of Virgin Galactic, said that he had “absolute confidence that the deal would be completed as billed”. He declined to comment further.

The mood in Abu Dhabi, however, is less certain amid growing concern about the US’s attitude towards Middle Eastern investors.

Three years ago, Dubai World’s acquisition of P&O caused uproar in some parts of the US over fears that Arab investors would control American ports, including New York’s. The deal was eventually cleared by CFIUS, but Dubai World immediately sold the US assets to another company to avoid further difficulties.

It is not clear why CFIUS has chosen to investigate the Galactic sale as Sir Richard’s latest venture does not appear to have any national security implications for the US. Sir Richard’s goal is for Galactic’s SpaceShipTwo, which the entrepreneur launched last week, to take tourists into space from a purpose built port in New Mexico.

More than 300 celebrities, entrepreneurs and rich individuals have already bought tickets, which cost $200,000 each, and Galactic is expected to make its maiden voyage in two or three years’ time.

It is possible that the CFIUS investigation has been triggered by Galactic’s association with Scaled Composites, the company owned by Burt Rutan, who is one of the world’s foremost aerospace engineers. If, as is likely, he also does work for the military, this could trigger a CFIUS investigation.

In addition, part of Virgin Galactic’s business plan is to use its spaceships to launch small satellites at a fraction of the cost of traditional rockets, which may be considered a national security interest in the US.

Aabar was unavailable for comment.