What you describe is not standard in most formal written English, but has been used by a number of English novelists.
Novels have always had a history of stretching the boundaries of both the content and the form of language, and this seems to be a case of that. It seems that longer works make it easier to use such conventions, since the style is used consistently throughout the work. Here are some specific examples using your style:
James Joyce, Ulysses, Chapter 16:
—Was she? Bloom ejaculated, surprised though not astonished by any means, I never heard that rumour before.
Alan Paton, Too Late the Phalarope, Chapter 1:
And the lieutenant said, I did not recognize you, Stephanie.
As a matter of style, I'd recommend you avoid doing this yourself unless you are the next James Joyce or Alan Paton and can convince your editor this is a good thing.
A couple notes are in order:
It's not possible in general to describe typeset works as having 'single' or 'double' spaces. Double spacing is a convention that arose from typewriting as a way to mimic the spacing used in typesetting.
Many of the novelists who use the convention you describe also use it with the "quotation dash", as in the example from Paton above.
There are other different quotation conventions too. In the US you find “double quotes” most often; in the UK you often but not always find ‘single quotes’. [In many non-English languages you find «guillemets or angle quotes» or even „these unbalanced quotes or claws“ - there are more, but admittedly this is just an interesting aside.]