The ZR is pitched directly against cars like the Clio, 206 and Mini ΂- all of them more modern designs with plenty of showroom appeal and strong reputations. Based on the ageing Rover 25, the ZR has its work cut out to compete. But compete it must. For MG to succeed, the ZR will have to be the biggest-seller of the range. No excuses will suffice ΂- the ZR has got to be good.

MG may be trying to sell itself as an uncompromisingly sporty brand but ZR is, in fact, a whole range of cars, and not all of them hot hatches. The range kicks off with the mild 1.4-litre ZR 105 and progresses to the slightly warmer ZR 120. There's even a turbo-diesel version. MG's pitch is that they all share a blend of affordability, aggressive looks and dynamic edge, a combination that the company hopes will attract young, enthusiastic buyers.

Most focused, and consequently the car aimed at people like us, is the 1.8-litre ZR 160. It is entering perhaps the most fiercely competitive end of the market. Looks are one thing, but to compete with the likes of the Clio 172, our current class leader, the ZR will need a breadth of ability that the 25 never displayed. We took both to the empty roads of Wales to find out if MG has created a serious new hot-hatch contender.

Renault's Clio 172 is fast becoming an icon in the hot hatch world. Performance was never going to be a problem but the supple and grippy chassis mean that all 170bhp is transmitted cleanly and with enthusiasm. Renault has always known what it takes to make an enjoyable front-driver and the Clio carries on the tradition. The latest version has its doubters, though. First impression was that the 172 had lost some of its roughneck charm: more refined, better built but a touch grown-up. Then there's the looks, which aren't to everyone's taste.

More seeds of doubt were sown last month (evo 34) when we pitted the Clio against the hot hatch legends. Though it held its own, it was nevertheless found to be lacking the finesse and adjustability of its forebear, the Clio Williams, while even older stagers, like the 205GTI and original Golf GTI, reminded us what hot hatches were all about ΂- pure entertainment.

This could be promising for the ZR. There may be a whole host of hot hatches ready to defend their sales, but there is a crucial gap in the market. It's up to the ZR to exploit it.

It certainly comes out fighting. Where the Clio puts the emphasis on subtlety, the ZR is unashamedly a hot hatch of the old school. The Rover 25 was always a good-looking car and the ZR doesn't disappoint in the styling stakes. The colour-coded grille surround and mesh intakes don't look as contrived as they do on the bigger MGs and the roof spoiler is neatly integrated. The 17in wheels are the finishing touches that make the ZR at once cute and imposing. It's a car you just want to jump in and take by the scruff of the neck. In a world where hot hatches have become more and more apologetic, it's a refreshingly honest design. Forget political correctness; the ZR appeals to the hooligan in all of us.

Jump in; forget the dated interior, fire up the 158bhp K-series and the slightly irresponsible feeling continues. A bigger airbox, revised ECU and freer-breathing exhaust help release 15bhp over the old 25 GTi and bring a welcome, deep-chested throb at tickover. A blip of the throttle brings a smile to your face. Time to find an empty road and test the ZR's mettle.

Even before we get there, a few things become obvious. The gearchange is pleasingly short-of-throw but feels woolly. It requires just the right amount of effort but has a strangely rubbery action. Not a huge distraction, but a small dent in the ZR's driver-centric pretensions. The pedals lack precision and are offset, which further undermines confidence. It's crucial for any driver's car that the controls feel positive, precise and uncompromised. For the ZR it's an immediate own-goal.

There are good signs too, though. Despite the big wheels and 45-section tyres, the ZR rides with remarkable composure. Sharp undulations that would have the Clio pogo-ing uncomfortably are smothered without fuss, while float and wallow never materialise. MG has certainly mastered the ability to combine a compliant ride with good body-control. The brakes are also more than a match for those fitted to the feisty French hatch.

The steering is well-weighted and nicely direct, too, but it soon becomes clear that while it's happy to communicate how broken the surface is, there's little meaningful information about grip and when it starts to run out. The first you'll know is when you find yourself applying more lock as the nose runs wide. And you'll be doing that more often than the ample rubber would lead you to expect.

Drive the ZR back-to-back with the Clio, and its shortcomings are brought into focus. Not only is the Clio more refined, it's also more fun. Crucially, it feels more thoroughly engineered.

The ZR's main problem is that it feels crude. The engineers were clearly keen to give it a hardcore appeal, and up to a point they've succeeded. It's never anything other than boisterous company; sometime it feels like it's trying a bit too hard.

Unfortunately, the engine's naughty, throaty appeal at low revs doesn't build to an inspiring top-end howl; instead it gets progressively more harsh and boomy. The K-series is an inherently smooth engine but in this application feels unnecessarily noisy yet curiously anodyne when you really stretch it.

It's a massive contrast to the Clio's smooth 2-litre powerplant. Driven gently, this engine is a model of refinement. Drop a cog or two and it takes on a hard-edged bark, never too loud or harsh, which encourages use of all the available revs. The gearchange is sweeter, too. MG claims 7.4secs for the 0-60 sprint, which would put the ZR 160 on close terms with the 172, though it doesn't feel quite that quick.

Chassis-wise, MG's engineers have created a curiously mixed bag. As we've said, it rides well and feels generally composed. But when you start to ask serious questions about the handling, the answers are none too convincing.

It's in slower corners that most of us like to play with a car's balance. While we'd like to think that fourth-gear four-wheel drifts aren't the preserve of racing and development drivers, unless you're feeling really brave it's the tight, second-gear bends that serve up the slidey moments.

Approaching a well-sighted corner, the ZR feels good under braking and reassuringly planted. Turn-in isn't razor-sharp but it locks onto line cleanly enough. The disappointment comes when you get on the power. The nose runs wide surprisingly early, the inside wheel scrabbling for grip. Try again with a sharp lift on turn-in and it's the same story. Steering on the throttle isn't on the menu.

Or so you thought. Strangely, the ZR's tail, which feels inert at lower speeds, gets unsettled through sweeping bends. MG has got the balance the wrong way round. A bit more security at high speed coupled with more fun in the slower corners would transform it. There is fun to be had as you make your rorty, tyre-smoking way across country ΂- if you like bullying a car, then you'll have a blast in the ZR ΂- but genuine poise is lacking.

The Clio shows how it can be done. The steering sends lucid messages when you're nearing the limits of adhesion. And, when you breach them, there are so many more options in the 172 that the ZR feels a bit one-dimensional.

Following the same route in the Clio, I find myself initially over-driving; turning in too early to counter the expected understeer, lifting off violently to try and balance the car's attitude. Approaching the apex I have to wind off lock as the front digs-in hard. A slight adjustment of style and the Clio shines. Driven smoothly, the 172 is faster, more committed and more satisfying. Understeer isn't eradicated, but the Clio does a better job of containing it, while lift-off oversteer is there for the taking. Never snappy, it just adds to the Clio's wider handling repertoire. It's also more confidence-inspiring when a fast sequence of bends approach.

Until MG Rover can inject some real poise and and involvement into the handling ΂- and our experience with the 45-based ZS (page 46) leads us to believe that it can ΂- then the ZR will be an under-achiever for us evo-types.

That doesn't necessarily mean it won't sell, though. The ZR 160 has a lot going for it and at ΂£14,345 (over ΂£1000 less than the Clio) it will prove a tempting package for many. It looks great: aggressive, sporty and fun without being too garish, and most of the time it's fun to drive. It appeals to the big kid in all of us; all chunky alloys, burbling exhaust and funky spoiler.

On this evidence, we'd say MG is going for young buyers more interested in looks and image than the last 10 per cent of handling prowess. The ZR 160 isn't cutting edge ΂- a hot hatch doesn't have to be ΂- but we can't help feeling that it's a missed opportunity. The thrills of an old-school hot hatch could have caught the imagination of those buying their first performance car ΂- and created some much-needed brand loyalty for MG's difficult years ahead.