You’re looking at Peugeot’s first return to the compact family hot-hatch market since the much-loved and increasingly rare 306 GTi-6. Its efforts since then have been mediocre at best, but the 308 provides a fantastic base from which to start.

There are entry-level 246bhp and upgrade-tastic 266bhp versions. They share a highly-turbocharged 1.6-litre petrol engine but the latter wears upgraded British-made Alcon brakes, larger but lighter wheels, sportier bucket seats and, crucially, a Torsen mechanical limited-slip differential. The price difference is modest, too.

The 308 is a tidy-looking car as it is, but the lower stance of the GTi brings out unexpected muscle in the curvaceous shape. The GTi 250 is 11mm lower than standard, but the 270’s ride height shifts back to normal thanks to its larger wheels.

GTi badges are everywhere in both, so you’re in no danger of forgetting you’re in a spicy one. The seats in the 270 look especially good, though, with their high side bolsters and contrasting red stitching.

There’s even an option on the 270 to add ‘Coupe Franche’ two-tone red and black paint. It looks stunning but at £1,300 would be a respray nightmare.

The beauty of a hot hatch is that it’s practical at heart. Put the back seats down and you can transport a chest of drawers for Auntie Irene. Very quickly. There isn’t much storage in the cabin, though.

Fortunately the GTi is spec’d up and comes with a reversing camera, keyless entry, front and rear parking sensors and a 12-volt power point for charging small devices. Sequential ‘scrolling’ indicators are a nice touch, too.

Rear legroom is very reasonable, and there’s no shortage of headroom thanks to a typically-high hatchback roofline.

In isolation the 250 is a great thing to drive. It’s balanced, fast and poised, and at 1,205kg fully-fuelled it’s a lightweight. But the 270 improves the package in loads of ways that you only see when you drive them back to back. The power and feel in the Alcon brakes is incredible, and the Torsen diff lets the car hold tighter lines at higher speeds through potentially tricky corners. Plus, the variable-spring rate suspension is tuned well for British back-roads, the steering is quick and precise, and overall it flows brilliantly.

The 270 is where it’s at for value. For £1,600 you get all that extra equipment, higher residual values, a better drive and more fun.

Sharper engine responses when you push the Sport button are joined by suddenly very red instruments. The 270 is big cat-aggressive in this setting but the slightly rubbish artificial engine noise that’s piped into the cabin actually takes away from the drive. It’s just as fast in normal mode and feels better resolved; more rounded. Leave that button alone unless you really, really have to have red dials.

Keep the counter-rotating rev counter needle above 3,000rpm and turbo lag is negligible. Below that it gives some throttle response away to its 2.0-litre rivals, but blimey, it shifts when you chase the redline.

Peak torque is maintained 1,500rpm longer in the 270, and that’s a Good Thing.

Its price is right in the thick of the best front-wheel drive hot hatchbacks around, so it’s competitive rather than a bargain. Strong rivals from Seat and Ford are a similar price or less, so it’s a straight punch-up between some serious heavyweights.

Hot hatchbacks have broad appeal. Young men are clearly going to be the targets, but the idea of a practical hatchback that can easily overtake old biffers in Nissan Notes who refuse to go faster than 35mph on country roads is one that can surely win plenty of favour. It has style and a measure of comfort on its side, too. It’s a real challenger, and a real GTi.

FACTS AT A GLANCE

  • Peugeot 308 GTi 270, from £28,155
  • Engine: 1.6-litre turbocharged petrol producing 266bhp and 243lb/ft
  • Transmission: Six-speed manual driving the front wheels
  • Performance: Top speed 155mph, 0-62mph in 6.0 seconds
  • Economy: 47mpg combined

Emissions: 139g/km