Hellmut Polz is product manager of the new SLK and he tells me that its main benchmark rivals were the BMW Z4 and Porsche Boxster. It's pretty obvious he's chuffed with the result, especially with what he claims are the class-leading dynamics of the SLK compared with its two deadly rivals.

Pardon me: an SLK that can seriously be considered next to the Boxster in terms of driver appeal? Six hours earlier I would have asked Polz if pigs fly past his office window on a regular basis, such is the stodgy legacy of the old SLK. But I don't. In fact I'm close to agreeing with him. The new SLK is a revelation because it actually handles, rides, accelerates and steers just like a proper sports car should. So what on earth has been going on?

Well, for starters Mercedes admits that the previous SLK was more of a cruiser than a sports car; designed to be a shrunken version of its bigger SL brother. With the new car it wanted to move the SLK right away from the SL and inject it with some real dynamism, so precision steering, adjustable handling and real driver enjoyment went to the top of the wish list. If more proof were needed that Mercedes was serious about this, it comes in the fact that it set out to develop a proper manual gearbox for the car (essential to its chances of besting the Boxster and Z4). You hardly need me to tell you how poor Mercedes' manual 'boxes have been in the past.

Start the 272bhp 3.5-litre V6 engine, slip the gearstick into first, release the clutch and it instantly becomes clear how much work has gone into this car. Perhaps the gearlever doesn't move around the gate quite as nicely as it does on the Z4, but from thereon in the news is almost all good.

The way the clutch engages feels much more tightly honed than in any Mercedes that's gone before, as does the steering. From the moment you move off there's much more connection with the driver, and things only improve when you hammer through some fast sweepers. You have constantly to keep reminding yourself that you're driving a Mercedes.

It's fast, too, with a claimed 5.6sec for the sprint to 60mph (5.5 for the auto), which feels believable but what makes it even more impressive is that it requires a change into third to get there.

While all this is happening there's a traditional V6 soundtrack accompanying you; never too loud or boomy, just encouraging you to squeeze a little harder and helping to crystallize the whole sports car experience.

Even though weight distribution has a slight front bias (52/48), understeer is well contained. Traction is equally impressive so it's a shame that Mercedes hasn't relinquished some more control to the driver. 'It's not the Mercedes way,' is the stock answer to the question of why you can never completely disengage the nannying electronics. Even when you switch off the ESP stability program, it still activates if the computer feels you're about to overstep the mark, before turning itself off again.

Inside, the transformation continues, with more room thanks to a 70mm wider track and 30mm longer wheelbase. The slimmed-down-SLR-look seats help liberate more space and offer good lateral support, although little in the way of squab support. The revised dash is clean and simple. It's all so much better than what went before; only the overly large steering wheel disappoints.

So from nowhere Mercedes has created its best driver's car in years. I thought the way BMW improved the Z4 over the Z3 was impressive but that's nothing compared with what's happened with the new SLK. It's a far better steer than the Z4, and will run the Boxster S mighty close. Should be an interesting group test...