Oxford's Reaction Engines Ltd (REL) announced it has received a €10,000 development contract with ESA, so it can work on its revolutionary Synergistic Air-Breathing Rocket Engine (SABRE).

This technology can work both in the Earth's atmosphere and in space - which is crucial to space planes.

The grant will add to the UK Government's commitment to invest £60 million in SABRE.

The project has also seen investment from defence company BAE Systems and the US Air Force.

"We've had valuable support from ESA and UKSA [UK Space Agency] to date, and today's agreement is a further vote of confidence not only in the revolutionary potential of this technology, but our ability to deliver on it," Mark Thomas, CEO of REL said in a statement.