Iain Dooley, PA senior motoring writer, says Mercedes-Benz is more aware of the environment and climate with its third-0generation M-Class.

Even in premium sport utility vehicle land they are counting their pennies. We know this because of the steady stream of lower CO2-emitting models coming from the likes of BMW, Land Rover and Audi. And now Mercedes is joining the club with its latest M-Class.

The German company's M-Class premium 4x4 has been a strong performer since it first appeared in the late 1990s. The second-generation model built on that success with an improved level of refinement and greater on and off-road performance.

This third-generation M-Class goes a few steps further. It's packed with the latest safety kit and boasts all the toys that are now familiar across Mercedes's premium model ranges. And in the spirit of downsizing to boost economy and reduce emissions, this M-Class can be had with a four-cylinder diesel engine – a first for the ML.

The 'big car, small engine' scenario hasn't always worked out, but with advances in turbocharging, weight-saving and engine management systems, it's no longer the grim experience it once was. In the case of the M-Class, Mercedes has installed a 201hp, 2.2-litre four-pot in its SUV, mated to a slick-shifting seven-speed automatic gearbox.

The ML 250 CDI is a genuine fuel-miser in the context of big, premium SUVs. With an official figure of 47.1mpg and a 158g/km CO2 rating, opting for a four-pot ML will be no more financially taxing than choosing a large family saloon.

It's pretty impressive when on the move, too. Sure, this particular ML can't hide its four-cylinder engine but, aurally, it never sounds hash or strained. Step up to the ML 350 CDI with its creamy six-cylinder diesel and you'll understand the difference. However, unless you plan on pushing the car to its limits on a daily basis, the 'lesser' model won't feel like a compromise.

Willing to accelerate around town and comfortable at a steady motorway pace, the ML 250 CDI isn't really short of anything despite its horsepower gap to the 350 CDI (255hp). And unlike some other brands, Mercedes hasn't left anything out – you still get a fully-functioning all-wheel drive system, which makes the car's economy all the more impressive.

Out of the box the ML boasts steel spring suspension, while you can choose from air suspension plus a full-on all-wheel drive system incorporating locking differentials, a low-range transmission plus full adjustable suspension. And make no mistake, the ML is more than capable of scaling heights and pulling its weight. Operating the uprated 4x4 mode is no more difficult than pressing a few buttons, while a helpful animated view of the car on its main cabin display shows steering angle, suspension position and the status of the rear differential.

Still, for all the technology even Mercedes knows that many MLs will spend most of their life on-road As such, the car's cabin is pleasingly luxurious while road and wind noise when on the move is minimal. To say it feels and behaves like a high-rise E-Class is no exaggeration – and something of a compliment.

You also get a similar level of standard and optional equipment to choose from, including numerous airbags, a wide selection of electronic safety aids, a decent (and upgradable) audio unit, supportive seats and plenty of space fore and aft for a growing family. The car's boot is predictably big, too. All in all, a well-judged and equipped premium SUV for the family or active types wishing to tow or venture off-road.

With its distinctive family 'face' and bold road presence – a product of Mercedes's recent change in design direction – this third-generation M-Class is a well-rounded evolution of what's become an important car in the Mercedes line-up. and the market's best-seller. There's no doubt that the inclusion of the four-cylinder diesel with further broaden the ML's appeal.