Reaction Engines Limited, a firm in Oxford, United Kingdom, has recently been awarded €1 million by the European Space Agency. This money is to be used for development work for the firm's SABRE engines.
The SABRE engines are for a reusable spaceplane that it is intended to be able to travel into space and return completely intact. 
Reaction Engines Limited says the Skylon plane could be in service within 10 years. When in service it would be intended to be regularly carrying up to 60 passengers into orbit much more cheaply than today.
The cash will be used to test a precooled jet engine that would cool the very hot air entering the engines and should permit the aircraft to fly more economically, like a jet plane. The plane will fly through the air to 26 km (85,000 feet) altitude and five times the speed of sound before using rockets to push the aircraft the rest of the way to orbit.
The BBC says that other aspects of the Skylon design will be investigated by EADS Astrium, the German space agency (DLR) and the University of Bristol.
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UK firm gets ESA funding to ground test new jet engine for spaceplane