Method and system for efficient energy recovery from heat source with external combustion engine. Invention include sequentially operating drive mechanism for power pistons and displacement pistons of gamma type Stirling engine, providing nearly ideal pistons operation sequence. Stirling engine is supplemented with working flow fluid control and separation member between working fluid reheater and rest of the engine during high pressure stage. Working fluid is circulated in flow control via one or more consecutive displacement cylinder/power cylinder stages before reheating. Control system is directing working fluid from inlet port to the first displacement cylinder, further to the first power cylinder and after expansion either to reheating or to the next displacement cylinder. Low temperature working fluid is finally directed back to the counter flow type reheater.