The UK is going to develop a satellite to trial innovative space technologies.
It is hoped the components and instruments flying on TechDemoSat (TDS) can prove their worth and go on to win substantial international business.
Surrey Satellite Technology Ltd (SSTL) will lead the project.
Payload participants are likely to include a novel instrument to measure the state of the sea, another to track ships from orbit, and even one to destroy TDS at the end of its life.
The latter is a "sail" that would be deployed from the satellite to force it out of the sky to burn up in the Earth's atmosphere. Efficient technologies to retire defunct spacecraft are expected to have big markets in the future.
Assuming that all goes well, a further £2,730,000 will be released to move the project into the build and test phase.
"One of our key philosophies is to help companies overcome barriers to market," said the TSB's Michael Lawrence.
"There are a number of British-based space companies out there that have great technology but they need to demonstrate it in orbit. Hopefully, this initiative will help them prove the technology works and that will open up commercial markets for them," he told BBC News.
Reflected GPS signals
TechDemoSat will have a challenging timetable. SSTL wants to be able to ship the satellite to the launch pad in 18 months' time.
All the companies and academic institutions hoping to fly payloads must pay their own costs.
The participants, while still under final selection, are expected to include Com Dev Europe, SSTL, Selex Galileo, Qinetiq, Aero Sekur, RAL Space, Oxford University, University of Surrey, Leicester University, MSSL and the Langton Star Centre (which will be providing a UK schools experiment).
One of the biggest proposed payloads at 7.5kg is SSTL's own - an Earth observation instrument designed to measure the state of the ocean.
"It makes use of the fact that there are a lot of GPS signals coming down from space and these get reflected off the ocean's surface. The instrument can intercept them to infer things about the sea state. So depending on whether the water is choppy or smooth, you get a different type of return signal," explained Doug Liddle, SSTL's head of science.
One of the smallest payloads, weighing just 750g, is being provided by Selex Galileo. It includes a sugar-cube-sized gyroscope that can sense the orientation of the spacecraft.
Aero Sekur is behind the space sail. It takes the form of a deployable membrane. Residual air molecules still present in the spacecraft's low-Earth orbit will catch the sheet and pull TDS out of the sky much faster than would normally be the case - certainly, within the international 25-year-guideline recommended for redundant space hardware.
It is hoped the TechDemoSat project can emulate the Mosaic (Micro Satellite Applications in Collaboration) programme of a decade ago.
Then, £11m of public investment in spacecraft projects led by SSTL ultimately resulted in the company winning almost £300m in export business.
It is just the sort of initiative recommended by the recent Space Innovation and Growth Strategy (Space-IGS) which set out a 20-year plan to maximise the potential of the UK's highly successful space sector.
There are more payload ideas in British industry and academia than can be accommodated on the demonstrator, and Michael Lawrence said it was possible the opportunity could be repeated in the future.
"We'll need to see how this one works - if it delivers to time, to budget," he said. "There will be many factors to consider, but if this goes the way we want it to then I would hope there will be a TechDemoSat-2."
One matter which still needs to be resolved is how TDS-1 gets into orbit.
With the TSB/SEEDA funding and the payload participants carrying their own costs, there is sufficient cash to get the satellite built - but not launched.
The cost of a ride to space for a 150kg spacecraft like TDS can be about £2.5m if the spacecraft shares the rocket with a group of other satellites. This is an issue the UK Space Agency will have to address in due course.