BAE Systems is taking a 20% stake in Reaction Engines to support the development of hypersonic rocket / jet engine Synergetic Air-Breathing Rocket Engine (SABRE).

The company will invest £20.6m for the stake, and will be the preferred supplier for certain components. It will provide aerospace technology development and project management expertise, as well as industrial, technical and capital resources.

Reaction Engines managing director Mark Thomas said: "This partnership builds on the outstanding technical breakthroughs that Reaction Engines has made and the positive assessments received on the potential of the technology from experts at the European Space Agency and the US Air Force Research Laboratory (AFRL)."

The AFRL confirmed feasibility of the SABRE concept in April, and is looking for collaboration with Reaction to work on the project.

SABRE enables the aircraft to move from standstill to speeds of up to five times the velocity of sound. The engine then moves to rocket mode, and allows the vehicle to operate at 25 times the speed of sound.

SABRE creates its own liquid oxygen by freezing air, saving on weight and fuel.

"Reaction Engines is a highly innovative UK company and our collaboration gives BAE Systems a strategic interest in a breakthrough air and space technology."

Ultra-lightweight heat exchangers allow the cooling of hot airstreams from more than 1,000°C to -150°C in less than 1/100th of a second, while preventing the formation of ice at sub-zero temperatures.

According to Reaction, the technology will help the launch of satellites into space at a reduced cost, and will also help passengers fly anywhere in the world in four hours.

A ground-based test of the engine is expected to happen by 2020 and an unmanned test flight by 2025.

The European Space Agency supported the viability of the engine, based on which the UK government announced a £60m commitment to the concept in 2013.

Reaction Engines designed an unpiloted, reusable single stage to orbit (SSTO) spaceplane called Skylon, which will run on the SABRE engine.

BAE Systems programmes and support group managing director Nigel Whitehead 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."