The Me 261 was originally designed for a record-breaking flight from Berlin to Tokyo, carrying the Olympic flame. Thereafter, it was intended for use as a reconnaissance aircraft and transporter. However, no particular urgency was attributed to the project. Nevertheless, a prototype had its maiden flight on December 23, 1940. The fact that the new and unproven Daimler-Benz DB 606 engine had been chosen for the engine repeatedly prevented possible series production. After the damage of the prototype V3 in July 1943, the project was discontinued without any militarily usable results. No Me 261 was ever produced in series.
Aircraft was designed as a cantilever mid-wing monoplane. Propulsion on the V1 & V2 prototypes was provided by two Daimler-Benz DB 606A-1/B-1 (coupled DB 601) engines, each with 2700 hp take-off power. V3 was powered by more powerful DB 610A/B (coupled DB 605).
Typical for the appearance of the prototypes were the disc tail unit and the extended shape with the wide wings. Wings forming a huge integral fuel tank. The goal of the development of this long-range aircraft in all-metal construction was a range of 11,000 kilometers and a speed of around 600 km/h.
Construction of three prototypes was authorised, beginning in early 1939. However, the outbreak of hostilities in September brought work to a halt due to its non-strategic nature. It resumed in the summer of 1940, and the V1 (BJ+CP) flew for the first time on 23 December 1940, the V2 following in the spring of 1941. The V2 differed from the first prototype by featuring smoother rear fuselage contours, and the stepped glazed portion was replaced by a smaller glazed blister. Consideration was given to using the Me 261 for long-range maritime patrols, but the difficulties of providing adequate defensive armament proved too great. The two prototypes were used for calibration work; they were damaged by Allied bombing at Lechfeld in 1944 and eventually scrapped.
In early 1943 followed a third aircraft (BJ+CR), this time powered by the DB 610 engines and with accommodation for seven crew. In May, after repairs following a landing accident, the V-3 was handed over to the Aufklarungsgruppe des Ober-befehlshabers der Luftwaffe, based at Oranienburg just outside Berlin. In Ob.d.L. hands it undertook several long-range reconnaissance missions.
Source
David Donald: Warplanes of the Luftwaffe – A Complete Guide to the Combat Aircraft of Hitler’s Luftwaffe from 1939 to 1945