In an astonishing setback for the shuttle program, NASA on Wednesday grounded future flights because the foam debris that led to the Columbia disaster still poses a risk to space missions.

During Shuttle Discovery's (search) liftoff, a chunk of foam flew off the external fuel tank just two minutes into the flight. NASA does not believe the debris hit the shuttle, but had it come off just a bit earlier it may have caused the same damage that doomed Columbia 2 1/2 years ago.

Even though the space agency doesn't think the lives of the seven astronauts are in danger, it plans a closer inspection of the spacecraft.

"You have to admit when you're wrong. We were wrong," said shuttle program manager Bill Parsons (search). "We need to do some work here, and so we're telling you right now, that the ... foam should not have come off. It came off. We've got to go do something about that."

Since the Columbia tragedy, NASA has spent over $1 billion on making sure shuttles would be safe from falling foam debris.

"We won't be able to fly again," until the hazard is removed, Parsons told reporters in a briefing Wednesday evening. "Obviously we have some more work to do."

Parsons said, "Call it luck or whatever, it didn't harm the orbiter." If the foam had broken away earlier in flight, when the atmosphere is thicker, it could have caused catastrophic damage to Discovery.

"We think that would have been really bad, so it's not acceptable," said Parsons' deputy, Wayne Hale.

Engineers believe the foam was 24 to 33 inches long, 10 to 14 inches wide, and just a few inches thick, only somewhat smaller than the chunk that smashed into Columbia's left wing during liftoff in January 2003.

NASA has said all along that Discovery's mission was a test flight designed to check the safety of future shuttle missions. Parsons refused to give up on the spacecraft that was designed in the 1970s.

"We think we can make this vehicle safe for the next flight," he said, declining to judge the long-term impact on the manned space program. "We will determine if it's safe to fly."

Atlantis was supposed to lift off in September, but that mission is now on indefinite hold. Parsons refused to speculate when a shuttle might fly again.

"Until we're ready, we won't go fly again," Parsons said.

In less than 36 hours, the euphoria of what initially looked like a picture-perfect launch on Tuesday evaporated thanks to images shot from just a few of the 100-plus cameras in place to watch for the very problem NASA announced.

The Associated Press contributed to this report.