Impressed by Avro's work on their other projects and convinced by Frost's technical proposals, the USAF settled on Project V2 and awarded Avro a contract worth $758,000. Top secret reports recently declassified from the U.S. show they had a real concern that the West might be lagging behind the Soviets in this type of development, especially if the latter had inherited the work of captured German aeronautical specialists. Like Frost, the Americans had a genuine interest in exploiting the capabilities of this type of technology.
  With its vertical take-off and landing capabilities, Y2 obviated the need for conventional runways and could theoretically be deployed almost anywhere. As a completely circular craft, it would also have embodied inherent stealth characteristics against detection by radar. Specifications were for the vehicle to reach speeds of between 1,720 and 2,300 rnph. Maximum altitude attainable was to be between 71,000 and 80,600 feet with a capability to hover at 18,000 feet.
  By 1957, Avro had invested nearly $2.5 million of its own money into the project while the USAF had added another $1.8 million. Encouraged by wind tunnel test results on scale models, the U.S. Army also decided to join the venture. An integrated USAF/Army program was established with funding of $4,432,497 for the development and test of two vehicles.
  Back at Avro, there was some skepticisin among the executive, concerning the feasibility of the project. James Floyd, vice-president of engineering and chief design engineer of the Jetliner and the Avro Arrow, was concerned at the amount of time, space and money that was being put against the project. He did not believe such a device would work as advertised. He had engineering specialists from the U.K. examine the design and they too were not convinced.
  The U.S. Army was interested in a subsonic version of Y2. They felt that perfecting a subsonic craft would be simpler than attempting the full supersonic model, while still proving out the concept. The USAF and Avro agreed and the subsonic Avrocar was born. Also known as Weapon System 606A, the VZ- 9A, and covertly as Project Silver Bug, the first prototype was unveiled in May of 1959, followed by the second vehicle in August of that year.
The Avrocar was approximately 18 feet in diameter. It had a gross weight at take-off of about 5,680 pounds. This included 840 pounds of fuel plus the weight of the pilot.

It was "...equipped with a five-foot diameter fan situated in its centre, exhausting via an internal duct system to a peripheral nozzle. The fan was driven by means of a tip turbine which used the exhaust from three [Continental] J-69-T-9 engines... The hot exhaust from the turbine was mixed with the cold flow from the fan in a duct immediately below the fan. This duct passes from the bottom of the fan beneath the cockpits, engine bays, and cargo compartments to the peripheral nozzle around the circumference of the vehicle..."
  The first free-flight test was conducted in Nov 1959 with Avro test pilot Mladyslaw "Spud" Potocki at the controls. He would hover and zoom as the exhaust from beneath the vehicle blew ice and other debris across the tarmac. Still, it was readily apparent that the design was running into difficulty. The Avrocar rose only three feet off the ground and achieved a forward speed of 55 kph in a sort of skittering motion. It was plagued by instability and power problems.
  Several years later, John Frost noted that in 1953, what Avro had actually discovered before anyone else, was the principle of the hovercraft. Had Avro not been so intent on trying to fly out of the ground-cushion effect created by the downward exhausting air, they could have gotten into the hovercraft business. Instead, they chose to try to solve the instabilities in order to fly like an aircraft, first at subsonic and then supersonic speeds.

CONVERTED TO HTML, AND HYPERLINKS ADDED, MAY 10, 2001.
Scott McArthur.