A large, centralized government operation will tend to go with solutions that are favorable to a select group of leaders, good or not, and often have a political tinge to it. Project employment and preservation of the bureaucracy becomes the primary goal. A huge "hammer" is usually the result, and the issue then becomes looking for "nails."

The Space Shuttle is what we got from a space transportation "Manhattan Project." At one time, our entire expendable launch vehicle industry was supposed to be scrapped in its favor. See also, the Carter-era Synfuels program.

The original "Manhattan Project" was more like a "Skunk Works" operation, with the key being removal of bureaucratic obstacles and targeting a very specific engineering goal. Total cost was something like $20 billion in 2004 dollars.

If the government must help research in this area, the best bet would be widely-distributed grants to many different projects, or maybe research tax credits. The best workable ideas will come forward on their own.