Errors in the modelling the satellite orbit have so far limited the ac
curacy in the processing of Satellite Laser Ranging (SLR) data. ii new
method is proposed to achieve a residual size consistent with the obs
ervational errors, and a stability of the geodetic network coordinates
at the same level. The orbit of the geodetic satellite LAGEOS is deco
mposed into very short arcs (less than half orbital period); if an are
is observed by at least 3 SLR stations, its initial conditions can be
determined. By combining hundreds of arcs, the position of the observ
ing stations, forming a local geodetic network, can be solved for. Oth
er new features of the algorithm are: formation of normal points and r
ejection of outliers totally independent from the orbit model; use of
a body fixed reference frame; processing only of the data from the sta
tions to be solved for. As a test, solutions are computed for European
networks of 5-6 stations using ly of data. These solutions are proven
to be robust with respect to dynamical modelling errors and truncatio
ns, and the residuals for the normal points are 1-2 cm for third gener
ation stations. The accuracy (as opposed to formal precision) of the s
olved for local network is tested by comparing two solutions using dis
joint data sets; the ly European network solutions are stable to 1 cm
rms in station coordinates, 1.5 cm rms in baseline lengths. The main l
imitation to the accuracy comes from systematic errors in the observat
ion process, e.g. in the calibration of the SLR stations; even better
accuracies could be achieved if enough data of the best quality were a
vailable. The new method is used, with 7 y of LAGEOS data, to compute
a local solution for 6 fixed European stations, including positions/ba
selines and station velocities/baseline rates. The results are consist
ent with zero relative motion for all stations in the local network, i
ncluding Matera; the accuracy, as estimated by the disjoint data sets
method, is 3.5 mm/y for the baseline rates. Matera is more likely to b
e on the European plate, but a few more years of data are needed to ac
hieve a high confidence level on this statement.