Ford has such high hopes for its new Fiesta, the company believes it is its “most significant global vehicle product since the Model T” — the first mass-produced affordable car, that set the world in motion in 1908. I wouldn’t go quite so far myself, but you can see why Ford is saying it. With sales of its traditionally large cars and trucks plummeting in its native US and losses mounting, the company is betting the farm on the Fiesta. If you’d tried to sell a car like this in the United States 10 years ago, you’d have been laughed out of the showroom, but that’s exactly what Ford is planning to do from 2010.

This Fiesta will be built on three continents and sold on five. Hyperbole aside, it is at least the most important new Ford of the past 10 years. And if it fails, we will take the blame: Brits are responsible for both the way it looks and the way it drives.

On the first count, it seems we have nothing to worry about. The Fiesta is as cute as can be, from its rising waistline to its falling roofline, from the ultra-slim headlights at the front to its clean, compact tailgate at the back. And it’s better still inside: it doesn’t just look right with the mobile phone-inspired centre console, classy dials and clean, clear ergonomics, it feels right too. The driving position is perfect, and it feels spectacularly well built for a car priced from just £8,695. So far so good.

Unfortunately Ford elected not to make the £9,000-£11,000 mid-specification 1.25 and 1.4 litre models — likely to be the biggest sellers — available at its launch, so it was in a three-door 1.6 litre Zetec S, the most sporting and powerful model available at launch and priced at £12,595, that I headed for the hills.

Expectations were high. Not only do I like small cars in general, I like Fiestas in particular: when it comes to simple driving pleasures, Fiestas have shown the way among their kind. This may surprise anyone who has looked at generation after generation of dull Fiestas and concluded, not unreasonably, that they must be equally boring to drive. Not so. There’s a reason the Fiesta is the car of choice of joyriders and, though Ford would wince at the association, it’s not just because they are in abundance (so are Vauxhalls, after all); it’s because they really are a joy to drive.

So if this Fiesta, with an all-new 118bhp engine and a body that’s 88lb lighter than that of its predecessor, was half as much fun to drive as its looks suggested, I was in for a ball.

I’ll say now that mild disappointment was a constant companion during those early miles. Just like the new Porsche 911 (admittedly some £50,000 further up the price range), the Fiesta is now all grown up. Much quieter, more capable and comfortable than its forebears. All that appeared to have been forgotten was the most important thing of all: the person behind the wheel. I could see how, like the new 911, the new Fiesta would be a far easier car to live with, and I could see, too, that many a Fiesta buyer would be more than happy to sacrifice some or even all driving pleasure for an easier life. But not me.

It was only when the roads cleared and I really started to throw the Fiesta around that I discovered that it still has its old flair; you just have to try a little harder to find it. Thrash the engine and hurl the Fiesta into corners, and instead of begging for mercy as would a Renault Clio, the Fiesta begs for more. The harder you drive, the better it feels: tight, poised, balanced and, for a sensible supermini, genuinely good fun.

There are some downsides, however. There’s not much room in the back, even by shopping car standards; over-the-shoulder visibility should be better; and even with the most powerful engine currently available, the Fiesta felt no more than mildly quick in a straight line.

Those wanting a Fiesta with real get-up-and-go will have to wait for an ST version, probably with around 170bhp, to arrive next year. Beyond that, unconfirmed rumours of a no-prisoners Fiesta RS sibling to the just-announced Focus RS continue to circulate. At the other end of the scale, an ultra-efficient “ECOnetic” diesel will go on sale at the end of the year capable of 76.3mpg in the combined cycle, and emissions of just 98g/km, exempting it from road tax.

In the meantime, the new Fiesta will come to market this October, and if the smaller-engined, less powerful variants that will make up the bulk of sales are only a little less fun, then I know of no car likely to challenge it for class leadership.

There is nothing revolutionary about this Fiesta as there was with the Model T, and I don’t think it’s Ford’s best car in decades. Indeed, the first generation Focus was a more remarkable, more visionary achievement in 1998 than this Fiesta is today. What it is, in fact, is an entirely conventional hatchback dressed up in some exceptionally pretty clothes and executed with a degree of finesse hitherto unseen in this kind of car.

No car can turn around the fortunes of a company as large as Ford on its own, but as steps in the right direction go, it is a significant one.

Ford Fiesta Zetec S

ENGINE 1596cc, four cylinders

POWER 118bhp @ 6000rpm

TORQUE 112 lb ft @ 4050rpm

TRANSMISSION Five-speed manual

FUEL / CO2 47.9mpg / 139g/km

PERFORMANCE 0-62mph: 9.9sec

TOP SPEED 120mph

PRICE £12,595

TAX BAND C (£120 for 12 months)

RELEASE DATE October 2008

VERDICT Ford’s finest effort in years

ALSO WORTH CONSIDERING

Toyota Yaris SR 1.8 VVT-i £13,655

For Good fun to drive, surprisingly practical and spacious

Against Harsh ride, poor cabin materials, noisy at speed

Peugeot 207 Sport 1.6 VTi £12,475

For Excellent ride quality, well built, decent performance

Against Rather dull to drive, looks already ageing