The US has grounded SpaceX?s giant Starship rocket while an investigation is carried out into why one exploded during its latest test flight.

The rocket's upper stage dramatically broke up and disintegrated over the Caribbean after launching from Texas on Thursday, forcing airline flights to alter course to avoid falling debris.

The Federal Aviation Administration (FAA) said it was working with SpaceX and other authorities to confirm reports of property damage on the Turks and Caicos Islands. There were no reports of injuries.

Elon Musk?s company has been told to carry out a ?mishap? investigation by the regulator, which will review the findings before deciding if Starship can return to flight.

The FAA confirmed it had activated a ?debris response area? to briefly slow aircraft outside the area where debris was falling, or stop aircraft from leaving their departure locations.

It added that several aircraft asked to divert due to low fuel levels while being held outside the affected area.

Starship is the biggest, most powerful rocket ever built, and is key to Musk?s ambitions of colonising Mars.

Thursday?s uncrewed launch was Starship?s seventh test mission, and the first involving a taller, upgraded version of the rocket.

The Starship upper stage, two metres (6.56 ft) taller than previous versions, was a ?new generation ship with significant upgrades?, SpaceX said before the test.

It was due to make a controlled splashdown in the Indian Ocean roughly an hour after its launch from Boca Chica, Texas.

The Starship system lifted off at 17:38 EST (22:38 GMT) and the upper stage separated from its Super Heavy booster nearly four minutes into flight as planned.

But then SpaceX communications manager Dan Huot reported on a live stream that mission teams had lost contact with the ship.

The Super Heavy booster managed to return to its launchpad roughly seven minutes after lift-off as planned, prompting an eruption of applause from ground control teams.

SpaceX later confirmed the upper stage had undergone ?rapid unscheduled disassembly?.

In a post on his social media platform X, Musk said ?preliminary indications? were that the problem was linked to an ?oxygen/fuel leak in the cavity above the ship engine firewall?.

The billionaire added that ?nothing so far suggests pushing next launch past next month?.

SpaceX?s Starship spacecraft and Super Heavy rocket ? collectively referred to as Starship ? is 123m (403ft) tall and is intended to be fully reusable, the company says.

Nasa hopes to use a modified version of the rocket as a human lunar lander for its Artemis missions to return to the Moon.

In the more distant future, Musk wants Starship to make long-haul trips to Mars and back ? about a nine-month trip each way.

The Starship test launch on Thursday came hours after the first flight of the Blue Origin New Glenn rocket system, backed by Amazon boss Jeff Bezos.

It was a huge step forward for Bezos and his company that has spent years getting to the point of sending a rocket into orbit.

Bezos and Musk both want to dominate the space vehicle market. (BBC)

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