British carmaker Rolls-Royce has been handed funding to build a nuclear reactor for the moon.

The UK Space Agency has given the company £2.9m (€3.3m) to construct the reactor, following a £249,000 (€284,144) study last year that it also funded.

The company is aiming to have the reactor built by 2029 and is collaborating with universities across the UK to hit the target.

The aim is to use the micro-reactor to power a future full-time moon base.

Rolls-Royce’s vision for a future moon base.

It is hoped it would provide enough energy for communications, life-support, and experiments.

UK Science minister George Freeman said: "Space exploration is the ultimate laboratory for so many of the transformational technologies we need on Earth: from materials to robotics, nutrition, cleantech and much more."

He said the project was a sign that the UK is a "major force in frontier science".

Rolls-Royce Director of Future Programmes Abi Clayton said the funding will, “bring us further down the road in making the Micro-Reactor a reality.”

“The technology [will bring] immense benefits for both space and Earth,” she said.

“The technology will deliver the capability to support commercial and defence use cases alongside providing a solution to decarbonise industry and provide clean, safe and reliable energy.”

The partnership with Rolls-Royce comes after the UK Space Agency recently announced £51 million (€58.2m) in funding for UK companies to develop communication and navigation services for missions to the Moon.

The British Government says the UK space industry is worth £16bn (€18.26bn).