Ford takes its hot-hatchback heritage to a new level of finesse with the Fiesa ST, says motoring editor Andy Russell.

One thing the 'Blue Oval' has always been good at is creating fast Fords from humble family cars.

Who can forget the exciting XR and RS models of the Eighties and Nineties – I almost cried the day I swapped my Escort XR3i for a 'nappy wagon' Sierra estate – in the days when hot-hatchbacks were just that for their performance and appeal to joy-riders.

The heat is really on again with the new Fiesta ST – Ford's fastest and most dynamic small production performance car ever – going head-to-head again with a Peugeot GTi in the shape of the new 208.

The Fiesta ST, developed by Ford Team RS, uses a 1.6-litre EcoBoost turbo petrol engine pumping out an impressive 182PS – not as much as the Peugeot or Clio Renaultsport 200 Turbo but it's the way it delivers the power that makes it so quick.

The Fiesta ST is immensely flexible, picking up cleanly and crisply from low revs so you don't need to keep stirring it into life with the delightfully positive six-speed gearbox. But even when you boot it there's no scrabbling as the front wheels are overcome by the power.

That said, it's hard not to unleash the power with the glorious exhaust growl amplified into the cabin... it's music to the ears and puts a huge grin on your face.

And that grin was even bigger when, over 400 miles including some exhuberant driving the Fiesta ST returned just shy of 40mpg. Economy is helped by the fact that, for all that power, the Fiesta ST is equally happy poodling along at low speeds in a high gear as it is being worked hard so, despite all that performance, it has all the everyday practicality of the Fiesta range with decent space for passengers in the back and a large, deep boot.

To put all the power down safely on the road the suspension, steering and brakes – the ST has rear discs – have also been tuned and the result is the best-handling Ford I have ever had the pleasure to drive.

With the ST suspension lowered by 15mm, excellent poise and balance and bags of grips, it just clings to the road through corners with fabulous feedback from the steering. The downside is that the hard ride lumps and bumps its way over the smallest road defects which becomes wearing on long journeys.

Fiesta ST1 includes 17in alloy wheels, full body-styling kit (the rear spoiler makes a good picnic tray!) and chrome dual exhaust but pay £1,000 more for ST2 which gains halogen projector-style headlights with LED day running lights, part-leather Recaro heated front sport seats, Sony DAB audio, starter button and privacy glass. Add the £275 style pack of painted grey alloy wheels, illuminated ST door sill scuff plates and red brake callipers.

The Fiesta ST draws on all of Ford's heritage for hot-hatchbacks and more than lives up to the promise of those stunning looks.