The European Extremely Large Telescope will be the first optical telescope capable of picking out the weak pinpricks of light that are reflected from planets as they orbit stars.

Astronomers claim the huge instrument, which will house a mirror the width of five double decker buses placed end to end, will be able to spot rocky Earth-like planets up to 100 million million miles away.

The telltale signatures in the light coming from such planets could also reveal whether there is water on their surfaces, which gases are in their atmospheres, and even if they may harbour life itself.

It will be the first time planets outside our own solar system have been seen using light from their surface. Current telescopes are not powerful enough to detect even giant planets in this way as the light they reflect is overwhelmed by far brighter stars.

The 1 billion euro (£700 million) E-ELT will have more mirror glass than all the other telescopes in the world put together.

It is expected to be so powerful that if astronomers were to use it to peer at the Moon, they would be able to see the car sized lunar rover that was left on the moon by astronauts during the Apollo missions.

With such high resolution, scientists believe they will be able to see Earth-like planets that orbit stars within a region known as the habitable zone, an area far enough away from the star around which it orbits to not be too hot to support life, but also not to far away and too cold.

As astronomers this year celebrate 400 years since Galileo first used a telescope with a lens just an inch wide to study the heavens, British scientists on Thursday presented the detailed scientific case for building the new giant telescope which will be four times larger than any other telescope yet built.

Isobel Hook, joint chair of the E-ELT science working group and an astronomer at Oxford University, said: “The astronomy community has been moving towards building progressively bigger telescopes to get sharper images.

“The resolution of the ELT is going to allow us to see objects and structures in the universe that we have been blind to until know.”

There are currently 344 known planets outside our own solar system which have been detected indirectly by looking for changes in light coming from stars as the planets pass in front of them. Almost all are gas giants similar to Jupiter.

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The E-ELT, which will gather more than 15 times more light than telescopes currently in operation, will be able to directly see small rocky planets as they orbit their stars.

By analysing the spectrum of the light reflected from these planets, it should also be possible to determine whether they have water or even vegetation on the surface.

Professor Andrew Cameron, an astronomer at University of St Andrews, said: “If they live up to the design goal, we will be able to detect Earth-like planets tens of light years away.

“There are lots of stars within that range, so there is real potential for finding a terrestrial planet that could sustain life.”

Construction of the E-ELT, which is being funded by the European Southern Observatory, an international research organisation made up of 14 European countries including Britain, is expected to start in 2010 and the telescope is due to be operational by 2018.

A decision on where the telescope will be located is to be taken at the end of this year. Candidates include La Palma in the Canary Islands and Chile.

The E-ELT will use 906 hexagonal segments – each four and a half feet across – that will be pieced together to work together as a single mirror housed inside a giant rotatable dome. Each segment will have to be continually adjusted by computers to produce a single image.

In the past, optical telescopes on Earth have also been hindered by turbulence in the atmosphere which can leave images of stars and galaxies slightly fuzzy.

This problem led to astronomers building expensive space telescopes like the Hubble Space Telescope which can operate outside of the Earth’s atmosphere.

Astronomers behind the E-ELT, however, plan to use new technology that could make future space telescopes unnecessary.

They propose to use powerful lasers positioned at several points around the giant mirror that will be fired more than 55 miles up through the atmosphere to create a faint “artificial star”.

This artificial star can then be used to measure the level of blurring that the atmosphere is causing and a special deformable mirror can be adjusted to compensate.

Scientists claim this will allow them to achieve some of the clearest images of our universe ever achieved from the surface of the planet.

Colin Cunningham, director of the E-ELT programme in the UK, said: “There will be more glass in this telescope than there is in all the other telescopes currently in use around the world put together.

“The detail it will allow us to see is four times greater than we can currently get. It is very exciting.”