A method for combusting fuel in an engine using a two-stroke homogeneous charge spark-ignition cycle. The method involving injecting fuel into partially compressed hot air to provide a homogenous charge to the cylinder before second stage compression in the cylinder, the engine having two variable compression ratios, a first variable compression ratio such that spark ignited HCCI-like combustion being emission free, and a second variable compression ratio for preventing pre-ignition at high loads. The expansion process of the engine having a chosen expansion ratio much greater than the compression ratio.