A £6 million ($8.5 million) air-breathing rocket engine technology demonstration programme has been announced after the European Space Agency contributed €1 million ($1.25 million) to it.
The programme aims to demonstrate Oxfordshire-based Reaction Engines' air-breathing Sabre rocket engine's technologies in representative environments by 2011.
Within its £6 million programme the company is paying EADS Astrium, the University of Bristol and the German aerospace centre DLR to support the work.
The €1 million ESA contract is part of Reaction Engines' ongoing fundraising effort for its Sabre work. Sabre would power Reaction Engines' Skylon horizontal take-off and landing reusable unmanned spaceplane concept that could place 12,000kg (26,400lb) into low Earth orbit.
"It is fantastic that Reaction Engines, the British National Space Centre and ESA have successfully secured this public-private partnership arrangement," says UK minister for science and innovation Lord Drayson.
When "air breathing" Sabre's heat exchanger cools incoming air that is compressed and burnt with gaseous hydrogen fuel, originally stored on board as a liquid. In rocket mode Sabre burns the same source of hydrogen with on-board liquid oxygen.
The programme will see a representative heat exchanger ground tested, an oxidiser-cooled combustion chamber demonstrated at the DLR Lampoldhausen facility and an adaptive nozzle design investigated by the University of Bristol.
Reaction Engines managing director Alan Bond says: "Years of research on Skylon and its Sabre engine mean we have an inside track on realising this goal."
The ESA contract funds are drawn from its technology programmes which are funded in part by the UK government's British National Space Centre.