Dr Andy Thomas has called out Richard Branson's bid to take passengers into orbit as being "dead-end" and "dangerous".
The remarks from the former NASA astronaut come after Branson's Virgin Galactic organisation last week celebrated the successful launch of a rocket plane into space for the first time.
SpaceShipTwo, VSS Unity, reached an altitude of 82,682m after being released by its carrier plane at 13,106m. It reached a top speed of 2.9 times the speed of sound.
After last week's successful flight, Branson said his group would now press on with its test program.
"Today we have shown that Virgin Galactic really can open space to change the world for good," he said.
While Thomas supported what Branson was doing, essentially "spinning off" the capability to launch satellites, he was less enthusiastic about the idea of taking tourists into orbit.
"It's true that he will fly to the edge of space, but he can't stay there. He falls right back down," Thomas told reporters in Adelaide on Monday. "It's really just a high altitude aeroplane flight and a dangerous one at that.
"As a technology to get humans out into space it's a go nowhere, dead-end technology."
Thomas worked for NASA after gaining his PhD in mechanical engineering in 1978 from the University of Adelaide.
During his time with NASA, Thomas flew into space four times and spent time on both the Mir and International Space Stations.
Thomas jumped on board South Australia's bid to house the country's space efforts earlier this year, declaring it the most appropriate state and one that is well-positioned to support a burgeoning Australian space industry.
"South Australia's got the heritage, the technical resources, the educational background, the technical infrastructure, the corporate infrastructure the industrial base," he said in June. "I think we've got a very good chance."
His campaigning paid off, with Adelaide last week being announced as home to the Australian Space Agency.
According to Thomas, the Australian Space Agency can be "many things to many people", saying on Monday the agency should spend its first five to 10 years helping develop businesses in the space industry and grow employment across the sector.
"Then I think you can address what directions you want to go in," he told reporters. "A space agency can be many things to many people. At one end you can just launch satellites on someone else's vehicle.
"At the other extreme you can have launch services yourself and that's a possibility that South Australia could aspire to in years to come.
Calling sites in South Australia ideal for launches, Thomas also said Australia has a good technology base to make it a reality.
"It just requires a sound business case," he added.
However, Thomas doesn't want the local space agency to become a large bureaucratic organisation like NASA, preferring it remain "lean and functional".
"But we should call it the National Australian Space Agency, I like the acronym," he said.
The Australian Space Agency will be located at Lot Fourteen at the old Royal Adelaide Hospital site.
The federal government announced during the 2018-19 Budget that it would be committing AU$41 million to the creation of the Australian Space Agency.
Under the guidance of former Commonwealth Scientific and Industrial Research Organisation (CSIRO) boss Megan Clark, the agency has a mandate to triple the size of Australia's domestic space industry up to AU$12 billion by 2030, generating 20,000 new Australian jobs, and getting more kids to take up STEM-focused careers.
According to CSIRO, Australia's space industry is estimated to have generated revenues of AU$3-4 billion last year, with a workforce of around 10,000.
CSIRO Futures, which is the strategy advisory arm and a partner of Australia's national science agency, recently produced a new roadmap to help determine the direction the country's space industry should take, highlighting that it is not just about putting people on the moon, but rather the commercialisation of all things space.
The roadmap focuses on three main areas for potential development: Space-derived services, space object tracking, and space exploration and utilisation.
The Australian Space Agency in September signed a Memorandum of Understanding with France's Centre National d'Etudes Spatiales, with both agencies joining forces to develop their space capabilities, particularly in the areas of operations, science, Earth observation, positioning systems, and communications.
The arrangement was followed in October by the signing of two similar agreements with counterpart agencies in Canada and the United Kingdom.