Visually, you can't tell the turbodiesel apart from the unleaded-sipping standard GTI. Only a rev-counter red-lined at 5000rpm gives the game away. It also means you inherit a dreadful driving position.

The GTI HDi drives just like a petrol GTI, too, with a nuggety ride, little roll through corners, a very pointy, lively feel and decent chuckability; it's rather old-school and fun. The standard ESP could be accused of interrupting a little too often, but when you brake really hard and the tail becomes sweaty-palmed light and nervous, you'll be glad of the stability control.

Steering, now electro-hydraulic (for fuel economy!) is over-light yet reasonably crisp. Disconcertingly, when you boot the Pug out of junctions the steering at first becomes light and floaty, before firming up when the turbo cuts in and the torque-steer arrives. Sophisticated it ain't.

By petrol engine standards 110bhp from 1.6 litres sounds weedy, but 180lb ft (and 195lb ft on 'overboost', the temporary extra shove available under full throttle for overtaking) is nicely meaty. It's reasonably refined for a diesel but it's still gruffly vocal above 3500rpm. At least Peugeot's made an attempt at tuning the exhaust for rortiness.

Yet the HDi lacks effervescence. Sure, the torque makes for relaxed pace but the high rev fun of a petrol hot hatch is missing and the fact that the power- band is so narrow is frustrating. Ultimately, however, the ready accessibility of gutsy mid-range urge means the HDi's pretty much as fast as a standard (137bhp) 206 GTI, while returning 40 per cent better fuel economy.

No doubt sporting turbodiesels like the GTI HDi represent the near future and are infinitely preferable to a fuel-cell hybrid with electric motors. If Peugeot can inject the thrills and involvement of its petrol cars into the mix, we'll all be onto a winner.