Western European cabinet ministers wound up a two-day meeting of the European Space Agency today by deciding in principle to participate in a U.S. project to launch a permanently manned space station in 1992.

But by increasing their budget and approving funding for a French-designed satellite launching rocket called the Ariane 5, the European officials made it clear that the agency is determined to push ahead with independent European activities in space.

The European part of the U.S. space station to be based on an Italo-German project called Columbus. Its cost has been estimated at more than $2 billion. So far West Germany, Britain and Italy have made funding commitments.

The French government, which had expressed doubts about the Columbus, still has not announced what share of the project it might underwrite, but European diplomats said the meeting had gone so well that French participation was almost certain.

The 14 cabinet ministers meeting here failed to make a decision on a French-sponsored plan for a small space shuttle called the Hermes. But the conference's final resolution included strong encouragement for the project.

The representatives of 13 Western European countries and Canada also voted unanimously to begin negotiations with the United States to determine the European role in the American manned space station project. The Columbus project calls for an adjacent laboratory module that could be detached to form the basis for an independent European space station.

Today's decision appeared to put an end to controversy over European cooperation with the U.S. space-station effort. An earlier experience in U.S.-European cooperation ended somewhat negatively when a $750 million investment in the 1973 Spacelab project failed to produce significant research or technological spinoffs for Europe, in the view of the officials here.

The agency's chairman, G.M.V. Aardenne of the Netherlands, announced that its annual expenditures would be increased by 70 percent, bringing its budget to almost $1.3 billion by 1990.