The Hotol project, a brief description

The Multi-Unit Space Transport And Recovery Device (MUSTARD) was a concept explored by the British Aircraft Corporation (BAC) around 1964-1965 for launching payloads weighing as much as 5,000 lb into orbit. It was never constructed. The British Government also began development of a SSTO-spaceplane, called HOTOL.

HOTOL, for Horizontal Take-Off and Landing, was a British air-breathing space shuttle effort by Rolls Royce and British Aerospace.
Designed as a single-stage-to-orbit (SSTO) reusable winged launch vehicle, it was to be fitted with a unique air-breathing engine, the RB545 called the Swallow, to be developed by Rolls Royce. The engine was technically a liquid hydrogen/liquid oxygen design, but dramatically reduces the amount of oxidizer needed to be carried on board by utilising atmospheric oxygen as the spacecraft climbed through the lower atmosphere.
Since propellant typically represents the majority of the takeoff weight of a rocket, HOTOL was to be considerably smaller than normal pure-rocket designs, roughly the size of a medium-haul airliner such as the McDonnell Douglas DC-9/MD-80. However, comparison with a rocket vehicle using similar construction techniques failed to show much advantage, and funding for the vehicle ceased.

HOTOL would have been 63 metres long, 12.8 metres high, 7 metres in diameter and with a wingspan of 28.3 metres. The unmanned craft was intended to put a payload of around 7 to 8 tonnes in orbit, at 300 km altitude. It was intended to take off from a runway, mounted on the back of a large rocket-boosted trolley that would help get the craft up to "working speed". The engine was intended to switch from jet propulsion to pure rocket propulsion at 26–32 km high, by which time the craft would be traveling at Mach 5 to 7. After reaching orbit, HOTOL was intended to re-enter the atmosphere and glide down to land on a conventional runway (approx 1,500 metres minimum).

During development, it was found that the comparatively heavy rear-mounted engine moved the center of mass of the vehicle rearwards. This meant that the vehicle had to be designed to push the center of drag as far rearward as possible to ensure stability over the entire flight regime.
Cooling the air from an exterior 1000 degrees Celsius to working temperates for the new engine became a problem too, as condensation and frosting blocked airflow and choked the intake supply.
 Redesign of the vehicle to do this cost a significant proportion of the payload, and made the economics unclear. In particular, some of the analysis seemed to indicate that similar technology applied to a pure rocket approach would give at least as good performance at lower cost.

In 1988 the government withdrew further funding, the project was approaching the end of its design phase but the plans were still speculative and dogged with aerodynamic problems and operational disadvantages.
A cheaper redesign, Interim HOTOL or HOTOL 2, to be launched from the back of a modified Antonov An-225 transport aircraft, was offered by BAe in 1991 but that too was rejected. Interim HOTOL was to have dispensed with an air-breathing engine cycle and was designed to use more conventional LOX and liquid hydrogen. Although the British government canceled the Hotol project Alan bond lead engineer looked towards European space agency for funding. But the Hotol project was deemed classified preventing the patent rights and the progress of a space plane, unless for military purposes.
In 1989 HOTOL co-creator Alan Bond formed Reaction Engines Limited which has since been working on the Reaction Engines Skylon vehicle intended to solve the problems of HOTOL. Much of the early work by Allen bond was to utilize his knowledge in computer aided design to work out the design flaws in Hotol. A fundamental problem of center of gravity was solved by simply placing the engines on the tip of the wings much like the design of a modern jet. The patent restriction for the Hotol project ended in 1993 and was later owed by Rolls Royce (who express no further interest), but Allen circumvented much of the thermodynamic ideas on the patent of which he first wrote. This allowed Reaction Engine to move forward and obtain support and funding.

The design problems of the original HOTOL project was ultimately solved by technology and by the will and determination of the original founders Allen Bond Richard Varvill and John Scott-Scott.
Despite the need for a 250 million pound to fund the next three-year development phase in which it plans to build a small-scale version of the complete engine, there seems to be a sense of inevitability that this company will succeed. Considering that there is no alternative then expensive chemical multi stage rockets.

While competitive space craft such as the US space shuttle retires from action, the scram-jet is the only contender. The future of orbital spacecraft need to embrace new concepts of propulsion. As road vehicles slowly change to economical alternatives, so should the space industry. The sad fact that political will power did not support Hotol during a time in which President Ronald Regan had plans to create a star-wars program. The orbital height of a military base as a tactical advantage would of relied heavily on a craft like HOTOL. Consider the possibilities if HOTOL would of been a success. A working fleet would of been flying in the 90's, and the possibilities of a orbital infrastructure might have transformed air and space travel. But despite the slow progress of this technology and the skeptics that would of mothball the project. HOTOL has reborn into SKYLON and a working prototype might be ready as soon as 2020...