The 270ft-long craft can be turned round for a new flight in hours and will slash the cost of space travel.
Skylon has no external rocket tanks and works thanks to an engine discovery on a par with Frank Whittle's jet.
Two engines suck hydrogen and oxygen from the atmosphere to fire it 18 miles up at over five times the speed of sound.
The engines then use oxygen from tanks to accelerate the ship into outer space.
Skylon could replace the Shuttle to carry cargo and astronauts to the International Space Station. It could even be used as a launch vehicle for a manned mission to Mars.
