[bonsai@mainserver tests]$cat spacesnew
hello
world
    this is
jan
m00
  hah
    hehehe
 one space
  two spaces
   three spaces
    foour spaces
test
void
blah
         test

[bonsai@mainserver tests]$
[bonsai@mainserver tests]$sed -e ':loop;N;$!bloop;${s/\n\([^ ]\)/\1/g;s/\n\( \{1,3\}[^ ]\)/\1/g;}' spacesnew 
helloworld
    this isjanm00  hah
    hehehe one space  two spaces   three spaces
    foour spacestestvoidblah
         test

[bonsai@mainserver tests]$