BAE Systems has bought a 20% stake in a company developing a radical engine that could propel aircraft into space.
BAE is paying £20.6m for the stake in Reaction Engines, which is developing a hybrid rocket/jet engine called Sabre.
Reaction says the technology would allow the launch of satellites into space at a fraction of the current cost and allow passengers to fly anywhere in the world in four hours.
The British government is also investing £60m.
The firms hope to have a ground-based test engine working by the end of this decade and begin unmanned test flights by 2025.
According to Reaction, an aircraft using such engines could take off from a runway and accelerate to more than five times the speed of sound, before switching to a rocket mode which would propel the aircraft into orbit.
Reaction has designs for such a plane, which it calls Skylon.
“Today’s announcement represents an important landmark in the transition of Reaction Engines from a company that has been focused on the research and testing of enabling technologies for the Sabre engine to one that is now focused on the development and testing of the world’s first Sabre engine,” said Mark Thomas, managing director of Reaction Engines.
Nigel Whitehead, group managing director of programmes and support at BAE Systems, said: “Reaction Engines is a highly innovative UK company and our collaboration gives BAE Systems a strategic interest in a breakthrough air and space technology with significant future potential.”