OK, that's not the first time you've read that. But consider what happened when Subaru took a road-going Spec C to the Nί¿½rburgring Nordschleife. The aim? To break the eight-minute lap barrier. With a specially fitted front spoiler and rear wing to maximise downforce and grip, 'Ringmeister and ex-Japanese Super Endurance Series champion Kazuo Shimizu squeezed every ounce of performance from the 1994cc flat-four to bring up the desired result: seven minutes, fifty nine seconds. (In fact Shimizu is no stranger to undercutting eight minutes, having recorded the same lap-time in the R-33 Skyline GT-R back in 1995.)

So what has Subaru done to slice seven seconds off the STi's previous lap record (8min 6sec) and make the Impreza an easier car to drive at the same time? Don't look for answers on the outside because the bodywork is basically unchanged except for a slightly wider rear bumper to house fatter rubber and a redesigned front spoiler.

You have to get under its skin to find where all that performance has come from. Firstly, engineers reconfigured the intercooler piping and intake and exhaust manifolds to enhance cooling and breathing efficiency and fitted a low back-pressure muffler to reduce exhaust resistance.

What it has effectively done is unleash even more torque, with the STi now boasting 304lb ft at 4400rpm (up 13lb ft over the outgoing model). That translates as 152lb ft per litre, compared with 147lb ft per litre for the Mitsubishi Evo VIII 280 MR and 127 for Porsche's 911 GT2. On the horsepower side, the official line is that the new STi still generates 276bhp at 6400rpm, but senior power unit engineer Shu Suzuki admitted that power is up and 'possibly' hovering at around 310bhp.

But the real refinement isn't under the bonnet. Subaru decided that the hardcore Spec C set-up was where the next WRX STi should be headed, not only in terms of performance, but also in terms of handling. Dull steering response and understeer were common complaints with the previous model, so Subaru has basically taken all the hardware from the Spec C parts bin and added three radical additions to get the Impreza round corners faster than anything else on the planet... except maybe the Evo VIII MR.

The new Impreza inherits the Spec C's suspension geometry including aluminium lateral links on the rear and a wider diameter steering rack for improved steering response and feedback. However, it is the new yaw- rate feedback sensor to the DCCD (Driver's Control Centre Diff), plus a front helical limited-slip diff in place of the Suretrac variant, that make the difference.

Unlike the Mitsubishi's AYC (Active Yaw Control) which distributes torque between the rear wheels, the STi's yaw rate sensor detects hints of oversteer and understeer and redirects torque between the front and rear wheels accordingly. In the meantime, the new front LSD channels changes in torque more smoothly and with greater responsiveness than Suretrac. A mechanical LSD on the rear ensures that the tail movements are kept in check as well.

Getting all this power down has been left to fatter, more aggressive tyres. The Impreza has always relied heavily on Bridgestone rubber for grip but this time Subaru has gone for broke with huge 235/45 ZR17 RE-070s with a high- performance shoulder design.

The combination of more torque, Spec C underpinnings, new yaw rate sensor, new helical LSD, beefed-up steering rack and bigger tyres shows how serious Subaru is about handling. The new STi doesn't just turn in faster than any previous Impreza, it devours corners with the minimum of understeer at the limit - a limit that has leaped yet again.

Turn in too early under heavy braking and the tail will slide marginally but the electronic systems bring you back to cornering neutrality.

Whether it equals the Evo VIII's AYC and traction control performance and cornering speed is debatable, but it comes damn close. Body roll is less pronounced and initial steering response is more precise and better weighted at the centre than before. Engine revisions also mean that torque response is quicker from lower in the power-band, with plenty of urge on tap from 3000rpm. Lustier top-end response has you changing gears on the notchy six-speed 'box more often than is strictly necessary, but that is part of the charm of this car.

While Subaru says it has no plans to export the most awesome Impreza yet, an international model employing several of these systems is not out of the question, according to one engineer. And when you think that the new STi's Y3.17m price-tag undercuts the Evo VIII MR by 400,000 yen, it has a significant price advantage too.

But with rumours of a totally new Evo X for 2006, it seems the the Impreza-Evo battle is set to rage on, and on, and on...