Passengers could fly to Australia in as little as four hours after British scientists invented a new cooling system which they described as "the biggest breakthrough in propulsion since the jet engine".
The new technology created by scientists at Reaction Engines can cool air entering an engine from 1,000C to -150C in a hundredth of a second without creating icy blockages.
This would allow a jet engine to run safely at much higher power than is currently possible without overheating, meaning it could reach speeds of more than 2,000mph.
Alan Bond, who led the research, said: "If you wanted to go to Australia, or anywhere else in the antipodal world in four hours or so, then that would be the best way to go and you would pay [the cost of] a first class or business class flight."
Incorporating the "Sabre" engine system into a passenger aircraft would involve redesigning its entire engine, so inventors do not expect it would ever be used for more than 10 per cent of flights.
But they claim it could revolutionize space flight, the purpose it was designed for, by allowing aircraft to fly directly into orbit and back to earth in one clean stage.
Current jet engines are not powerful enough to launch an aircraft into space because they can not operate at a high enough power without overheating.
The breakthrough technology is a cooling system which uses an array of thin pipes, arranged in a "swirl" pattern and filled with condensed helium, to extract heat from air and cool it to minus 150C before it enters the engine.
In normal circumstances, this would cause moisture in the air to freeze, coating the engine with frost, but the company has also developed a method which prevents this from happening.
Having successfully demonstrated the engine and gained formal approval from the European Space Agency, the company hopes to secure £250m to produce a final design, and the services of a manufacturer.
The endgame is an 84m-long aircraft called Skylon which would take off from a runway and operate like a jet engine at low altitude, taking in oxygen from the air, before switching to "rocket mode" and burning its own fuel supply after reaching high speeds.
The "air-breathing" initial phase would allow the vehicle to carry less weight from the outset, meaning it would have more thrust relative to its weight and could fly into orbit in one smooth phase rather than using disposable rockets as it rises.
Having a fully reusable and more efficient engine would dramatically reduce the cost of space flight, researchers claim. They hope their engine will be operational within a decade.
Reaction Engines described the invention as "The biggest breakthrough in propulsion technology since the jet engine".
Tim Hayter, CEO, said: "This means that we can build a hybrid air-breathing rocket engine. What this is going to permit orbital and high-speed propulsion."
Dr Mark Ford, of the ESA, who monitored the testing of the engine, added: "The gateway is now open to move beyond the jet age."
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