A manned rocket ship powered by laughing gas and rubber fuel, financed entirely with private funds, reached the edge of suborbital space Monday to win the $10 million Ansari X Prize -- a milestone that its builders and backers say will usher in a new age of commercial space tourism and travel.

Built by designer Burt Rutan and steered by veteran test pilot Brian Binnie, the squid-shaped SpaceShipOne was carried aloft at dawn Monday by its mother ship, White Knight, which resembles a giant dragonfly. At an altitude of 45,000 feet, the spaceship disengaged from its cradle, paused a moment and then lighted its rocket, sending a long white contrail across the skies above the Mojave desert during the 84-second burn.

Unlike two previous flights, which were plagued by wild rolls and problems with stability and trim, Monday's launch saw SpaceShipOne blast straight and true to a record-breaking altitude of 367,442 feet -- 69.7 miles. The craft went 30,000 feet higher than the previous record holder, the X-15 rocket jet, which performed its feat in 1963.

At its apogee, Binnie experienced about three minutes of weightlessness and saw the curvature of Earth below and black void above. He became the 434th human to go into space and only the second astronaut to get there without the help of a government.

After reaching velocities three times the speed of sound, Binnie glided SpaceShipOne back to the desert airport for a perfect landing before thousands of spectators.

"It is literally a rush," Binnie said of his flight. "You light the motor and the world wakes up around you." He compared the flight to riding a rodeo bull and said, "I wake every morning and just thank God that I live in a country where this is possible."

Binnie was greeted on the tarmac by Rutan and his financial backer, Paul Allen, the billionaire co-founder of Microsoft, who put $25 million into the project. Also on hand was Richard Branson, head of the Virgin Group, who announced last week that he is going to buy five larger and still unbuilt five-seater spaceships from Rutan in a $100 million bid to take paying passengers -- for about $200,000 a seat -- into space.

Branson said Monday that he plans to launch his fleet of Virgin Galactic spaceships from airports in Japan, Australia, England, South Africa and the United States. "And the next generation of spaceship will have even bigger windows," he promised, adding that he saw no reason that a healthy octogenarian such as his father couldn't take a ride.

Branson said there is undeniably a market for space tourism. He said that his Web site had 5 million hits in recent days and that more than 5,000 people had offered to pay deposits for a seat on the first flights, which Branson says will begin in three years. He promised, along with Rutan, to be on the inaugural flight.

When Allen was asked whether he would go along for the ride, he mentioned that as a boy he tried to build a rocket out of an aluminum lawn chair. "It made a loud noise and melted in place," he said. "As for whether I'll be holding hands with Richard and Burt on the first flight, I don't know."

Marion C. Blakey, head of the Federal Aviation Administration, attended the flight and said the winner of the X Prize "opens a new frontier in commercial spaceflight." She predicted that one day rocket ships might be used not only for quick sightseeing jaunts but also for suborbital passenger flights from the United States to Asia and Europe.

Blakey said her agency is working on regulations to oversee the new industry, and that Congress is debating a set of bills to support commercial space tourism.

Branson said the sightseeing flights would only be the beginning, and he predicted that Rutan or others will develop safe and affordable technology to launch and maintain orbiting "five-star" space hotels.

"The message to investors is to start investing, the market is here, a multibillion-dollar market," said Peter Diamandis, chairman of the X Prize Foundation. "There is a real dollar to make. Surveys show that 60 percent of public want to go to space."

Col. Rick Searfoss, the X Prize judge and the commander of two shuttle flights, welcomed Binnie, 51, to the exclusive club of astronauts. "We're starting another space age. We're taking the blinders off." Searfoss said the future of space travel will be shared by private entrepreneurs. "In many respects," he said, "our government space agencies have lost their way."

Branson praised Rutan as "the most brilliant aviation engineer of the last century," adding: "If somebody says something is impossible, Burt will set out to prove him wrong."

After touchdown Monday, Rutan said there are now two space agencies in the country -- his and NASA. Rutan has often disparaged NASA as being what he sees as a bloated and timid bureaucracy. On Monday, Rutan said that the "big boys" at NASA, and its contractors Boeing and McDonnell Douglas, must have watched his flight and concluded, as he put it, "We're screwed."

The Ansari X Prize was inspired by the $25,000 award that Charles Lindbergh won for crossing the Atlantic nonstop in 1927. The contest was conceived by space enthusiasts as a way to launch a commercial space tourism business.

The X Prize competition has attracted 26 teams worldwide. It required that the winning craft -- made by a civilian entrepreneur with no government financing -- carry three 198-pound people, or a pilot and equivalent ballast, into suborbital space, defined as 100 kilometers or 62 miles, and then repeat the feat within two weeks.

The Rutan team put test pilot Michael Melvill into space twice -- first in the test flight in June and again on Wednesday. Melvill's second flight topped out at 337,591 feet, but only after the craft went into a series of dizzy rolls, 29 in all, that could have ended in tragedy.

Rutan and his team say they decided to alter the trajectory for Monday's flight, which seemed to calm SpaceShipOne's tendency to roll.

"This is very, very safe," Rutan said. He promised that tourist hops to space would be "safer than the first commercial airline flight."

Rutan said that what makes his SpaceShipOne so robust is its lightweight materials of graphite and epoxy (it weighs about 6,000 pounds and can be towed by a pickup truck), a safer propulsion system fuel of rubber and nitrous oxide, and the ability to fold and open its wings, which stabilizes the craft like a badminton shuttlecock.

If the third spaceflight Monday was beginning to feel routine, that is the point. With the exception of refueling its rocket motors, 97 percent of the spaceship was reused for the two X Prize flights.

The X Prize foundation also disclosed that it would host another competition in 2005 or 2006, in which operations could win cash and prizes for longest flight, highest altitude and most passengers.

Pilot Brian Binnie stands atop SpaceShipOne after his flight as Richard Branson, left, designer Burt Rutan and backer Paul Allen watch.