A rocket engine that could revolutionise space flight and air travel has been given a £60 million boost by the Government.
The Sabre engine is being developed for "Skylon", an 84-metre reusable spaceplane capable of taking off from conventional runways and reaching low Earth orbit.
The new investment, made through the UK Space Agency, will pave the way to building the first full-scale prototype.
It follows the success of critical tests of the technology involving the rapid cooling of air entering the engine at hypersonic speed.
Sabre, designed by the Oxfordshire based company Reaction Engines Ltd, stands for Synergistic Air Breathing Rocket Engine.
Unlike every other rocket engine, it breathes air while travelling through the atmosphere which is used to burn liquid hydrogen. As it nears the edge of space, it switches to an onboard oxygen supply.
Skylon would do the same job as today's rockets, delivering payloads of up to 15 tonnes into low Earth orbit, but at a 50th of the normal cost.
Operating as an aircraft that can land and take off again and again, it has the potential to revolutionise access to space.
The Sabre engine could also be used to power a new generation of Mach 5 (five times the speed of sound) passenger jets, cutting the flying time from the UK to Australia to less than four hours.
Science minister David Willetts, who announced details of the investment at the UK Space Conference in Glasgow, said: "By supporting this breakthrough technology we are giving the UK a leading position in a growing market of new generation launchers and removing one of the main barriers to the growth of commercial activity in space.
"Sabre has the potential to completely transform how we currently access space whilst further boosting the burgeoning UK space sector."
Development of Sabre could also create an estimated 21,000 high value engineering and manufacturing jobs.
The European Space Agency (ESA) managed the tests that convinced the Government to make the new investment. They centred on a key element of the Sabre design, a pre-cooler to chill hot air entering the engine at enormous speeds.
"Ambient air comes in and is cooled down to below freezing in a fraction of a second," said Mark Ford, head of ESA's propulsion section. "These types of heat exchangers exist in the real world but they're the size of a factory.
"Reaction Engines has produced something sufficiently light and compact that it can be flown.
"The idea behind the engine is that the vehicle flies to about Mach 5 in the lower atmosphere using air breathing before it switches internal liquid oxygen for the rest of its flight to orbit.
"At that speed, the air is coming in extremely fast. You need to slow it down in order to burn it in the engine, and doing so will raise the temperature of the air to about a thousand degrees, which can exceed engine material temperature limits."
Alan Bond, who founded Reaction Engines and has led the project for over 20 years, said: "This significant investment in British high-tech technology is a fantastic shot in the arm for the UK aerospace and space sectors, as well as the broader economy.
"Thanks to the Government's support, Reaction Engines Ltd - a private company, and a great example of British enterprise - will now be able move to the next phase in the development of its engine and heat management technology, bringing much-needed jobs and investment to the UK.
"Our proven revolutionary technology is the result of two decades of hard work and has the potential to change the world just as the jet engine did."