FROM the punchy three-cylinder engine to the surprisingly roomy interior - the Skoda Citigo is a small car with big ideas.

With a minimal amount of horsepower you would think the petrol engine would find life a bit of a struggle - but it shows plenty of aggression from a standing start so is no mug when the lights go green.

The 999cc unit manages to eke out every drop of performance while also boasting a refinement that can only impress.

The baby Skoda is one of the latest generation of city minis, but it is not out of place on the motorway where its relaxed performance makes long journeys anything but a chore.

When it comes to the rigours of urban living the Citigo excels - helped by sharp steering, a tight turning circle and an ability to treat badly maintained roads with disdain.

The cabin easily copes with two adults seated in the rear while the five-door version I drove offers easy access.

There's a relatively large 251-litre boot - although its lip is a bit high - the rear seats fold when extra space is required and there are plenty of cubby holes including a glovebox, large door bins and a centre console storage space.

The dashboard is a slimmed down version of what is used on larger Skoda models so is well set out and easy to use. A slot on the top of the dash marks the home for a satellite navigation and infotainment system.

The whole point for most people of city minis is low running costs and here the Citigo scores heavily.

As well as being cheaper to buy than its VW up! and SEAT Mii sister models it also gets more goodies thrown at it. Coupled with an  average fuel economy figure in excess of 60mpg and low carbon dioxide emissions you won't be able to run the Citigo for peanuts - but you'll not be far off.

Younger drivers currently being hit over the head with insurance premiums will like the Citigo's low rating and, judging by the snaps of smiling twenty-somethings in the natty brochure Skoda provided, they are the target market.

Zipping around town it's easy to appreciate the sharp steering and grippy handling, while controls where you'd expect them, big windows and slick gearchanges make driving in the urban jungle a cinch.

Although based on the VW up! the Citigo features new body panels and the Skoda grille which gives the car a modern appearance.

There is plenty of safety kit with the Citigo including head and thorax airbags on both sides as well as the usual driver and passenger airbags. It also gained a maximum five-star rating in the Euro NCAP crash tests.

The Citigo has three levels of trim - S, SE and Elegance. The entry-level model gets a radio/CD player and power steering, while the SE model I tried adds air conditioning, remote central locking and electric front windows.

Go the whole hog by stepping up to the Elegance model and Skoda throw in heated front seats and a portable infotainment system which includes satellite navigation.

It is safe to say there will be many competitors - both in the city mini and supermini markets - sleeping uneasily in their beds with the Citigo now on the prowl.