FOLLOWING on from the fairly successful Ford-based X-Type, Jaguar's latest foray into the smaller executive class had to be at the top of its game, and it most certainly is.

At similar prices, the new XE is as quick and as much fun to drive as a BMW 3-Series but more economical and has lower emissions and lower insurance costs.

On top of all that, it's a Jaguar. So you get all that up-market British interior feel that the Germans never seem quite able to match.

I drove the SE turbo diesel automatic, which comes with close to 180bhp and in most models drives the rear wheels through an excellent eight-speed automatic gearbox.

The engine is very smooth and quiet and gives a huge surge of power in the gears with a reasonably sweet sound as the revs rise - something very unusual in four cylinder diesels.

The standard Jaguar automatic, with pop-up button controller, gives silky changes up or down and responds well to the kickdown.

There are also Sport and Manual settings, but as is so often the case the Manual is superfluous because Sport does everything so well and so swiftly if you're in a hurry.

Its a hugely enjoyable car to drive in almost any situation, with a comfortable ride (without the optional sports suspension) and the most fantastic grip and roadholding, complimented by delightfully positive handling and balance.

It feels hugely safe through the corners and this agility is backed up by an excellent range of built-in safety kit including automatic emergency braking and a pop-up bonnet to reduce injuries to pedestrians.

The cabin is has a lovely ambiance, with plush materials for the excellently supportive seats and other equipment that beats the opposition, including climate, audio remote, alarm, DVD player, keyless entry and starting and stability control.