#2 for a Bridgeport as suggested by Chris. Probably the best starter machine for 12 inch to the foot scale work. Pretty fair to say that if you can lift it on to the table you can machine it. Anything smaller and you start running into space / access problems. Which can frequently be got round but it just makes life harder. Main comment against a Bridgeport is that its rather floppy as industrial machines go. Still very stiff by hobby standards. Just means using appropriate cutters and feeds. Concerning engine work I know of Hilman Imp engines being worked on for racing using an older round ram machine, smaller and flopppire than the modern variety, with every success. Cylinder head refurbishment, blocks bored out for oversize liners and so on.
Being relatively common there are plenty of Bridgeports out there to choose from so its not that hard to find a decent one and parts are readily available. Just don't try to do things on the cheap. Say £2,000 to £2,500 for a decent one with DRO you can just drop in the shop and use. I've got about that much into mine which started out at £500. Lots of work too. If it the price is really right one needing basic heavy servicing level repairs may be worth a look but costs do add up and if anything other than basic consumables like belts and similar needs attention other stuff probably ough to be done too.
Deckel / Thiel / Clone is more versatile but exploiting that versatility means a lot of setting up. You need the measurement gear for that too which is less than cheap. A good Deckel will be more expensive than a Bridgeport and you really should get the accessories you need at the same time as they are hard to find and can be very, very costly. A Deckel is not a fixer up machine. Complex innards, parts expensive and often unobtanium. OK if you want a project but not if you just want to use it. Of course if you have £5,000 to £10,000 to spend….. But then you are getting into CNC territory.
If I were starting over I'd be taking a very close look at CNC.
Clive