All depends if you have any other issues with the car?
As it is the car may be worth £300 - £600, a new engine is a good option but will still cost you once you have a good engine, chains and fitting you still looking at £ 1500. You may never get that back.
But if you like / love the car and you want to keep it think what car you may get if you sold the car and put the re-cost of a new engine or rebuild. You may not get much for £1800 one member explained this to me and it made sense to keep mine.