The site near Campbeltown in Argyll has received UK Government funding as part of £1.3 million shared with other potential spaceport sites in Cornwall and Snowdonia.
However, Prestwick said its bid for cash to establish a site for horizontal launches had been "shortlisted for further consideration".
The £488,000 funding for Machrihanish is to develop its "spaceport cluster plan centred on an aerodrome with the longest runway in Scotland", the UK Government said.
It will go to the Machrihanish Airbase Community Company (MACC), which bought the site in 2012, and will complete a feasibility study by next March.
A spokesman said: "The funding will be used to explore horizontal spaceport development services from the site, using UK based space technologycompanies.
"The project will provide a feasibility assessment for the use of the spaceport for a range of spaceflight related activities, long-term the projects aim is to encourage the development of a spaceport cluster.
"It will be led by MACC with consultancy support from UK Launch Services Limited and Grey Consultants, with industry support from TAO Tech UK, specialists in high-altitude platforms and pseudo-satellites, and Reaction Engines, the UK's foremost developer of hypersonic engines.
"The team we have will bring a huge wealth of experience and technical expertise to the project to allow us to develop a robust, sustainable and deliverable planfor the establishment of spaceport related activities on site.”
The former RAF base's runway is nearly two miles long and one of the longest in Europe.
It was built during the Cold War and used by Vulcan bombers, with the US Navy establishing a naval aviation weapons facility there in 1968.
Snowdonia Aerospace also received £499,811 "to create a centre for space R&D, training and satellite launch", while £306,480 has gone to Cornwall Council for an "accelerated business development and research project" at Spaceport Cornwall for "future flight technologies".
A spokesperson from Prestwick Airport said: “Our funding bid to the UK Space Agency has been shortlisted for further consideration. We await the final decision.”
In 2016, it reckoned it was in pole position to be granted the first spaceport licence by the UK and anticipated the first flights by this year.
The UK Government said its latest round of funding was on top of up to £7.85m it intended to "invest in developing facilities and operational capabilities at Spaceport Cornwall with Virgin Orbit".
Last year, it earmarked £31.5m for developing a vertical launch site near Tongue in Sutherland.
A spokesman said: "Once operational, spaceports have the potential to create commercial space launch services in the UK, giving our world-leading satellite industry access to space from UK soil for the first time and creating high-skilled jobs in the surrounding areas."
UK science minister Chris Skidmore said: "A truly strategic approach to space is needed now more than ever and we must develop our national space capabilities, while strengthening our international partnerships, to take full advantage of opportunities like satellite launch from the UK."