VLT observations of GRB 990510 and its environment

We present BVRI photometry and spectrophotometry of GRB990510 obtained with the ESO VLT/Antu telescope during the late decline phase. Between days 8 and 29 after the burst, the afterglow faded from R=24.2 to ~26.4. The spectral flux distribution and the light curve support the interpretation of the afterglow as synchrotron emission from a jet. The light curve is consistent with the optical transient alone but an underlying SN with maximum brightness R>27.4 or a galaxy with R>27.6 (3-sigma upper limits) cannot be ruled out. To a 5-sigma detection threshold of R=26.1, no galaxy is found within 6'' of the transient. A very blue V~24.5 extended object which may qualify as a starburst galaxy is located 12'' SE, but at unknown redshift.