After all, converting the ZT to rear-drive and shoehorning-in a chunky, longitudinally-mounted V8 where there had previously been transverse four-cylinder and V6 engines looked like a low priority for a company that would soon need a whole new range of cars. Yet the first V8-engined ZT, the entry-level 260ps (256bhp) model, is in production. We've road- tested one, performance-tested it at Millbrook and flung it around our benchmark test track at the Bedford Autodrome, accompanied by what we originally thought would be its rivals. It transpired that the ZT 260 V8 isn't anything like a BMW 330i, Jaguar X-type 3.0 or indeed any small sports saloon you can buy for ΂£28K. It is a seriously good driver's car, though.

When Rover parted company from BMW, part of the strategy adopted by the newly independent British company was to emphasise its thoroughbred sportiness. This included renaming itself MG Rover and developing MG versions of the staple Rover 25, 45 and 75 models. The new ZR, ZS and ZT MGs were generally pretty good (exceptionally good in the case of the ZS 180) but the V8s were the headline-grabbing centrepieces, intended, one suspects, to show the world just what the company was truly capable of.

MG hasn't skimped on the creation of the top ZTs, not on design and not on development. The ZT 260 has visited all the 'must-see' locations on the checklist of any serious performance car maker; it has spent quality time at the N΃¼rburgring in Germany and the super-fast Nardo test track in southern Italy, as well as enduring the heat of Australia and the cold of Canada. In short, it has been through the mill.

And this radically re-engineered, mercilessly developed, thundering saloon looks... well, just like a regular MG ZT. How can this be? It seems almost perverse that visually a 4.6-litre ZT could pass for the attractive but considerably less potent ZT 190, but by the time we handed back the keys we appreciated the tactics.

Although MG Rover's chief engineer of sports cars, Randal Jackson, claims that the ZT's motor is an antidote to high-revving European V8s, the truth is that securing a supply from Jaguar, Mercedes, Audi and especially BMW was unlikely - none of them would have wanted to power a direct rival. So, like many budding specialist sports car makers, MG Rover secured use of the Ford 4.6-litre V8 used in the Mustang.

State-of-the-art it isn't, with a thin-wall cast-iron block and aluminium heads, each bank with a single cam and eight valves. With the help of faster Ford specialist Roush, MG created its own induction system for better packaging and crisper throttle response, its own exhaust manifolds to enable close-coupled catalysts, and a new engine management system to ensure it meets European noise and emission regulations. Power and torque figures were maintained, resulting in 256bhp at 5000rpm and 302lb ft at 4000rpm. Compared with Euro V8s, power is modest but torque is competitive.

It's a relatively inexpensive engine, though, which helps keep the price of the ZT saloon down to a fiver under ΂£28,000. That looks terrific value compared with V8-powered rivals, the cheapest of which are the Audi S4 and Jaguar S-type 4.2 at ΂£36K.

Prior to firing up, clues that the ZT 260 isn't your regular ZT are there if you know what to look for. There are the discreet 'V8' badges, four tailpipes and a lot more hardware under the rear if you stoop to look, plus bigger brakes behind the rear alloys and some subtle aero tweaks around the nose. But it's the creamy, woofly idle that really brings home the extreme re-engineering that the ZT has undergone. It's a wonderful sound - deep-chested yet surprisingly hushed - and it changes the character of the ZT entirely.

And this ZT is utterly different, but also astonishingly well sorted and polished in its feel and demeanour. We have extensive experience of the V6 ZT 190, but this car feels like it was built to be V8-powered and rear-drive from the outset. It surely helps that the V8s - even the forthcoming 380bhp supercharged model - have been engineered to be built on the same production line as the other ZTs and Rover 75s.

Integrity of build is complemented by dynamics that are exceptionally well judged and a credit to everyone involved in the making of the V8. Take the ride: wheel control is very tight yet the ZT is remarkably supple and tolerant of poor surfaces.

There's no discernable squat when you unleash full torque, and dive is remarkably well checked when you brake hard. Meanwhile, there is a consistency of weighting to the controls - steering, clutch, brakes - that is deeply satisfying. Only the gearshift disappoints - it's comfortably hefty but the gate of the five-speeder (which is stacked with MG's own well-chosen ratios) feels rather soft-edged, a little ill-defined.

In many vital areas, the ZT V8 is a quality item and no mistake. Initially, though, it doesn't seem to have that much firepower. A big V8 in a moderately-sized saloon sounds like a recipe for yee-ha performance, yet although there's an edge to the rumbling note of the Ford engine when the throttle touches the carpet, even in first and second gear it doesn't threaten to break the firm hold that the modestly proportioned rear tyres have on dry tarmac.

How come? Well, throttle response is soft and although there's plenty of torque, this is an engine that feels tyre-wrenchingly grunty only when it gets close to peak torque at 4000rpm. Also, it isn't a light car. Compared with the V6 ZT it's a full 210kg heavier, tipping the scales at a little under 1700kg in basic trim, or 'Core', as MG describes it. Add all the bells and whistles of the SE version (΂£32,750) and you're looking at nearer 1800kg. That said, one of the reasons the chassis of the V8 feels so beautifully poised is that what mass there is is better distributed than in the V6 front-driver, coming in at 53/47 per cent front/rear, unladen. The estate versions (which cost ΂£1000 more) are even better balanced.

Despite the mass, there's a pleasing agility about the ZT V8. Turn the wheel and it doesn't feel like there's a heavy engine over the front axle, the nose tacking briskly, accurately and roll-free to the apex. In the dry, grip levels feel more than adequate, the ContiSportContacts (225/45 ZR18 front and rear) hanging on tenaciously, and quietly. It takes a great deal of provocation to get the rears to do anything other than deliver strong traction and grip.

The differential does have a limited-slip device but it's not the traditional cone/plate type which keener enthusiasts might enjoy. No bad thing, really, given such a device's tendency for sudden, mouth-drying, wet road oversteer, because the ZT 260 has no type of electronic stability control system. Instead, MG has chosen the Dana 'Hydratrak' LSD, as fitted to Holden HSVs and some TVRs, which is essentially a fluid pump that allows one wheel to slip whilst maintaining some drive to the other, so that you keep moving forward.

The rear axle of the ZT 260 is to exactly the same specification as the one that will be found under the 380bhp model, including a third, centrally-mounted Bilstein damper for the hefty differential. For this application it is somewhat over-engineered, the upside being that it feels immensely strong and superbly controlled - if an inside wheel does spin, it does so cleanly, without any squirm or tramp.

All of which means that, against expectation, the ZT 260 is a remarkably well-mannered and refined performance saloon. Much of the regular ZT design exudes an inherent rightness, pertinently an ergonomically sound, low-slung driving position with superb seats, an attractive interior and a sense of integrity. To this the V8 adds an engine of intoxicating character that is hushed at a cruise, bellows softly at full chat, and produces a deceptive turn of speed. It might not feel as gut-wrenchingly punchy as you'd expect, but the more you drive the ZT V8, the more you appreciate that the superbly judged chassis is disguising your real pace.

And while it might not feel as playful as you'd expect a thumpingly torquey rear-driver to be, by the same token it is remarkably benign - you don't need to be highly skilled to drive it quickly and appreciate its poise and agility. That's why the down-played looks suit it so well. It's not a leery roughneck of a car, a hot-rod chassis under a sober saloon-car shell, it's a subtle, engaging, big-hearted driver's car.

It retains its composure when it rains, too, and as we discovered during our session at the Bedford Autodrome, if you're confident enough you can discover another altogether more entertaining level...