And the Ibiza delivered. It wasn't the most tactile hot hatch to drive, nor was it the quickest, but in terms of value for money it had most of its rivals licked. A hot Cupra R followed, but while it addressed the cheaper car's performance issues, it failed to play its baby brother's value card and lacked real handling finesse.

When the old Ibiza was replaced in January 2002, the performance models disappeared. The Cupra line continued with the Leon, but the smaller hatch was lamented by its fans, many of whom had used it as their first step into the realms of performance motoring.

Now the sporty Ibiza is back, but this time it isn't a Cupra. SEAT says the monicker is being reserved for a hotter version later in the year, while an even spicier Cupra R is on the cards for 2005 and promises to be the first Ibiza to join the 200-plus bhp club. Meanwhile, the FR is as good as it gets for now. The badge stands for Formula Racing and the Ibiza is the first SEAT to use it. In future, FR badging will apply to all of its entry-level sports models.

Under the bonnet, the ΂£13,500 FR uses VW's stalwart 1.8-litre engine in 150bhp guise - a unit renowned for its low-down torque and flexibility, albeit at the expense of top-end performance.

Still, in the compact Ibiza shell 150 horses are enough to make the car feel pretty lively: 0-62mph is dispatched in a respectable 8.4 seconds while terminal velocity is reached at 134mph, which is plenty quick enough for a junior hot hatch. If it qualifies for the group 10 insurance SEAT is hoping for when it comes to the UK in March, then the FR is bound to be on the shopping list of younger enthusiasts looking for an entertaining supermini that won't break the bank. And it's not short on appeal. For starters, the Ibiza is one of the best-looking cars in its class. Styled by ex-Alfa Romeo man Walter de Silva, the FR has more than a little styling panache - its purposeful snout matched by a neat, wedge-shaped profile and rounded off by cute circular tail lights in crystallised clusters.

You can spot that this is the sporty model by virtue of its gunmetal grey 16in alloy wheels, matching 'titanium' door mirrors and mesh front grille, yet the look is subtle enough to avoid attracting the boy-racer tag. Inside, the standard car's rather dull interior gets some chrome finishing, white dials and leather on the steering wheel, gearknob and gear lever gaiter, but the effect isn't quite as convincing. It's all very well made and smartly put together, but those who like their performance cars to be something special will feel short-changed by the rather sombre cabin.

One area that doesn't disappoint, though, is the FR's chassis.

Previously, the quickest version of the current Ibiza was the 2-litre Sport - a car not really worthy of the badge due to its lacklustre performance, sloppy steering and excessive body-roll. Here, those issues have been addressed; SEAT's engineers have been careful to create a distinction between properly sporty Ibizas and those lower down in the range. So the suspension ratings have been changed, with stiffer coil springs all round, while the front anti-roll bar's diameter has been increased by five per cent. SEAT says the modifications bring about a 15 per cent reduction in lateral body movement, but in practice the changes feel more effective than the figures suggest, giving the Ibiza an agility that shames its lesser brethren.

The steering, too, is much better - it has greater accuracy and weights up well at speed, although it still lacks much in the way of feedback on slower, tighter corners.

The FR is a fun car to drive, especially considering the price, but it does have a few rough edges. The five-speed gearbox could be more precise, while the torquey 1.8-litre engine is in need of more refinement, as well as strength at the top end. The brakes are effective and come with ABS and Emergency Brake Assist as standard - both welcome additions - but the pedal feels soft and lacks progression.

That said, the Ibiza once again plays its value-for-money card well, with generous amounts of standard kit and attractive looks that are bound to make it a hit with younger fans.

Those seeking more thrills would be advised to wait for the hotter Cupra and Cupra R versions. On first impressions, the revised chassis should well be able to cope with the extra power.