Quoting multiple sentences in a short quote. No interruption

I’ve encountered this grammar several times while proofreading academic papers. There is a tendency among authors to use inline quotes with multiple sentences quoted. For example,

John cited Powell’s belief that the search for ‘life on other planets has been a disaster. Now is the time to cut funding to the programme.’

My question is two-fold. (1) Is it even possible to have two sentences within this kind of inline quote? And (2) if you can, how do you treat the punctuation in British English. In other words, should the full stop go inside or outside the quote marks.

I consulted the Chicago, APA and MLA handbooks/guides, as well as the punctuation guide and Butcher’s copyediting book. None of these seem to address this issue, always showing how to quote for one sentence quotations or block quotes. This leads me to believe you can’t quote multiple sentences in a inline quote couched in a sentence. But if this is the case (3) how does one punctuate/rewrite a sentence like this to convey the meaning of the author correctly?

The three options I’ve thought of is (1) an ellipsis and putting the final full stop outside of the quote marks

John cited Powell’s belief that the search for ‘life on other planets has been a disaster . . . now is the time to cut funding to the programme’.

or breaking the quote apart

John cited Powell’s belief that the search for ‘life on other planets has been a disaster’. ‘Now is the time to cut funding to the programme.’

or, a third re-written option

John cited that the search for ‘life on other planets has been a disaster’, part of Powell’s belief that ‘now is the time to cut funding to the programme’

I don’t feel the third option really reflects what was intended, and moreover, my question is more general and is intended to reflect multiple examples where this occurs.

Any help is appreciated.