Reaction Engines, the British hypersonic aviation pioneer, could collapse within hours unless it can persuade investors to provide millions of pounds for a rescue deal.
Sky News understands that Reaction Engines faces the prospect of going into administration as early as Thursday, after weeks of talks with a group of existing and potential new backers.
On Tuesday, people close to the company said it remained engaged in discussions and that a rescue could yet emerge.
Talks to secure roughly £20m in additional funding initially focused on the UAE's Strategic Development Fund (SDF), the investment arm of the UAE's Tawazun Council.
However, these began to falter earlier this month, with the identities of the other parties prepared to bail the company out unclear.
Sources say the collapse of Reaction Engines also threatens to cause a headache for Mercedes-Benz, the automotive group which supplies four of Formula One's constructors with engines which use cooling technology supplied by the British company.
Reaction Engines is now said to be engaged in active pursuit of several other investment options.
PricewaterhouseCoopers has been on standby to be appointed as administrator for several weeks.
Its strategic shareholders, BAE Systems and Rolls-Royce Holdings, are said to be unwilling to provide enough capital to bail it out.
Under the earlier discussions, SDF would have emerged as the single-biggest investor in Reaction Engines, which has developed cooling technology which is aimed at powering aircraft to Mach 25 - or 19,000 miles per hour - outside the Earth's atmosphere.
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Tap hereSky News revealed earlier this month that the company had opened talks with the government about the deal, because of the sensitive defence and security implications in the context of the National Security and Investment Act.
A number of City investors have in the last two months slashed the value of their stakes in the business amid doubts about its survival.
According to Reaction Engines' most recent update to shareholders, it grew its commercial revenues by more than 400% last year and is understood to have a strong pipeline of contract and R&D opportunities.
In January last year, Reaction Engines announced that it had raised £40m of additional equity, taking the total sum it had banked from investors to roughly £150m.
Founded in 1989, the company is chaired by Philip Dunne, a former defence minister.
A Reaction Engines spokesman declined to comment.
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