Ten years ago, Honda didn’t have a diesel engine.

To satisfy European demand for oil-burning models, Honda had to resort to buying in engines from other manufacturers – the 2001 Civic used a 1.7-litre Isuzu unit, for example.

That didn’t sit well with Honda, who are, at their core, an engineering company.

They knew they could engineer something better, and in 2003, they launched their own diesel power-plant – the 2.2-litre i-CTDi – and it went on not only to power the Accord, Civic, CR-V and others, but also win Engine of the Year in 2005.

Fast forward to today, and excellent as the 2.2 unit is, its relatively large capacity can prove something of a handicap when it comes to the ever-increasing search for lower emissions and increased fuel efficiency.

So Honda designed another diesel engine.

And it’s a cracker.

The new 1.6-litre i-DTEC uses an aluminium block and cylinder head, plus a variety of light-weight components and engineering measures (such as cylinder walls only 8mm thick, unheard of in a diesel) to keep its overall weight down.  The result weighs 47kg less than its larger brother, the 2.2.

There’s less internal friction, too (around 40% less than the 2.2), as well as a new Garrett turbo and a new precisely controlled high-pressure fuel injection system.

The result is 120PS at 4,000rpm, but more useful is peak torque of 300Nm at 2,000rpm – that’s only 50Nm less than the larger 2.2 unit.

Admirable as these numbers are, all this engineering effort would be for nought if the new diesel isn’t substantially more efficient.  But it is.

Official figures show 78.5 mpg on the combined cycle, and during our testing we found maintaining a realistic 60mpg average perfectly achievable over a mix of driving conditions.  Indeed, a 1.6 i-DTEC Civic recorded almost 84.9mpg on a recent MPG Marathon, so even the most lead-footed of drivers should be able to attain something in the high 50s.

Add in CO2 emissions of just 94 g/km and you can forget about paying for road tax for a while, as the 1.6-litre Civic resides firmly in VED Band A.

Away from the figures, however, the new small diesel continues to deliver.

There’s a modest amount of turbo lag at the deepest recesses of the rev range, but that’s soon replaced by a healthy wodge of torque that drives you forward with surprising rapidity.  There’s only a gradual drop-off in power as you venture closer to the redline – certainly nothing like the torque cliff that some diesel engines suffer from – and in practice it serves as a natural reminder to change gear.

And, with a new six-speed manual gearbox to play with, that’s something that’s particularly enjoyable in the new diesel Civic.  It’s 7kg lighter than the ‘box used for the 2.2-litre car, and Honda have endowed it with a short throw and beautifully fluid shift action that makes stirring your way through the ratios a very enjoyable experience.

Honda say the Civic features an Active Noise Cancellation system that uses the door speakers to cancel-out unwanted engine noises, but we still found a touch too much diesel-ness made its way into the cabin at idle.

On the move, however, things settle down, leaving just a slightly gruff thrum to remind you which fuel you’re burning.

Other noises are well filtered, with tyre noise kept in check and a notable absence of wind noise.  And, on the subject of noises, our test car had clocked up nearly 15,000 miles but didn’t emit a single rattle.

Honda have expended considerable effort in optimising the Civic’s aerodynamics, and that includes the fitment of an active shutter in the front grille that closes at high speed and a pair of small spoilers on the car’s rear flanks to smooth out air flow.

The suspension has been re-tuned to compensate for the new engine’s lighter weight, and soaks up bumps and even small pot-holes without transmitting too much of a disturbance into the cabin.

Although equipped with a feeling of stability at speed, the body can suffer from the occasional bout of lateral pitching over undulations, and encountering prolific over-banding use by local authorities mid-corner can cause the Civic to alter its line briefly.

Piling into a corner sees body roll initially well resisted, but can build through fast roundabouts as you progress along its radius.  On a country road, however, the Civic corners with surprisingly alacrity.

Overtaking slower-moving traffic is a joy, and the new engine’s torque reserves mean a simple flex of your right ankle is usually enough to dispense with most obstacles.  But, given an excuse to sample that gearshift action, you might as well swap in a new ratio just for fun.

The 0-62mph figure of 10.5 seconds seems curiously slow, given how responsive the Civic feels in real life, and this is likely the result of gear ratio choices made for efficiency reasons.  When giving it the beans, first gear is good for nearly 25mph, with only a brief stay in second gear before an extended trip to the world of third gear.  The Civic is one of those cars that proves how oft-quoted performance figures are not necessarily indicative of real-world flexibility.

Add in the well balanced electric power steering, and the new diesel Civic becomes a willing companion on any journey.

It’s a comfortable place to be for any length of time, with an appealingly chunky steering wheel and a cabin design that cocoons you.  The instruments feel a little Star Trek on first acquaintance but in practice are clear and well positioned.

There’s an excellent degree of adjustability for both seats and steering wheel, and plenty of headroom, too (I’m 6ft4), the only minor gripe for tall drivers being the hard plastic on the door that can interfere with your right knee on long journeys.

It’s practical, too, thanks to Honda’s famous Magic Seats.  Fold the rear seat backs forward, and the seat base dives down to create a completely flat load floor.  Alternatively, the seat bases can be folded up to allow tall loads to be carried in the cabin.

In the boot, there’s 401 litres of space with the seats in place, but with an additional 76 litres in a handy under-floor storage compartment.

Clever touches are everywhere: clips to hold the rear seatbelts out of the way to make folding the seats easier, a hook on the bottom of the rear parcel shelf to hold the boot’s under-floor compartment open, and special cubby holes in the boot sides to hold the now ubiquitous air compressor and can of tyre gunk.

That these touches exist show that Honda have devoted considerable time and effort to tuning and honing the Civic into the package it is today.  That’s a continuing process, and we note the recent announcement of a series of revisions for the 2014 Honda Civic includes reference to a further tweak of the suspension that may resolve our observed lateral pitching.  The addition of a little extra sound proofing would make finding fault with the Civic an extremely difficult job.

With the Civic range starting at £16,995, some may suggest that the 1.6 i-DTEC’s £19,575 is a premium too far.  We’d counter that by pointing out that even the base SE grade is well equipped, with alloy wheels, remote locking, all-round electric windows, and climate control as standard.

Move up the range and the ES grade adds dual-zone climate control, parking camera, front fog lights, cruise control, automatic headlights and wipers and Bluetooth connectivity for £20,780.  Make the jump to £23,585 for an EX and it’ll include leather upholstery, heated front seats, premium audio system, front and rear parking sensors and satellite navigation, while the range-topping EX GT throws in 17-inch alloy wheels, keyless entry, HID headlights, panoramic glass roof, privacy glass and auto-dimming rear-view mirror.

Honda is famous for its VTEC-equipped petrol engines, and there are two – a 1.4 and a 1.8 – still available in the Civic range.  What’s remarkable is that we’d discount both of those, and would instead steer potential Civic buyers to either of the i-DTEC diesel units.

Given that the 1.6 loses little to its big brother but gains plenty, it’s our pick of the range.

No mean feat for a company that, until recently, didn’t ‘do’ diesel.

Base Price £19,400 Price as tested £19,400
Engine 4-cylinder turbodiesel, 1597cc Transmission Six-speed manual
Power 120ps @ 4,000rpm Torque 300Nm @ 2,000rpm
0-62mph 10.5 secs Top speed 129 mph
Economy 78.5 mpg CO2 94 g/km
Dimensions 4300 x 2065 x 1470 (LWH) Kerb Weight 1428 kg