THE Volkswagen Golf GTI established the hot hatchback segment 39 years ago and has defined the market - both good and bad - ever since. Not bad for an after-hours project conceived by a bunch of engineers with nothing better to do.

Six generations later, the GTI continues to set the bar by which other hot hatchbacks are judged but it no longer sits at the top table.

Cars like the Renault Megane RS, the Vauxhall Astra VXR and the new Civic Type-R have moved the market on to a new level. Fans call them hyper hatches.

Even Seat - VW's junior partner - has a hyper hatch in its ranks: the frenetic Leon Cupra which also holds the Nurburgring production hatchback lap record. This will not do.

ON THE ROAD:

Seat may have cheekily used the same blown 2.0-litre engine as used by the Audi S3/Golf R but its junior status means the Leon's powerplant is detuned so it doesn't tread on the toes of the Golf hyper hatch.

However, the cheapest Cupra costs £28,210 - a cool five grand less than the Golf R - and it's only slightly slower (the Spanish flier takes half a second longer to reach 62mph and is all done at 154mph, a whole 1mph lower than the Golf).

With this kind of fratricidal rivalry the Golf R had better be good.

Golf fans can rest easy. The Leon Cupra is a great hyper hatch - it easily has the legs on a Golf GTI, for instance - but it still can't match the Golf R.

What's truly surprising is how Volkswagen have married stunning performance with everyday usability.

The Golf R packs a 300PS punch and hits 60mph in less than five seconds making it the fastest acclerating Golf ever, but it doesn't suffer the bone-crunching ride that compromises so many hyper hatches.

Driving the Golf R back-to-back with a traditional rally special like the Subarus WRX STi is revelatory: the Golf R glides over minor road imperfections that send bangs and crashes shuddering through the Scooby's cabin.

Even with 'Race mode' selected, the Golf R feels mature and well tied down rather than rock hard and unruly. Pitch the car into a series of corners and it just pulls through courtesy of four-wheel drive which pushes power to the rear when the fronts start to lose grip. There's precious little dive when you drop the anchors and the clever steering rack (which varies the number of turns lock-to-lock from 2.75 to 2.1) responds to the merest flick.

That's great but it's the way the Golf R fulfills its role as a workaday hatch that really surprises.

If you go easy on the accelerator the Golf R feels as smooth and easy-going as any other family hatch. There's no hint of histronics from the highly-tuned engine - it just gets on with the job of doing what's asked of it - and the ride makes life comfortable for every one aboard.

The Northern Echo:

The test car was fitted with dynamic chassis control (DCC) which monitors driving conditions and adjusts the dampers for maximum confortable or maximum attack. With DCC you also get independently variable compression and rebound damping for even better control.

I only have one meaningful criticism. Volkswagen has emasculated the engine's vocals to such a degree that it felt the need to add an artifical sound creator (the slightly sinister-sounding 'Soundaktor') for added drama. It didn't really do the job to my ears and, judging by the number of YouTube videos showing how to get rid of it, I don't think I'm alone.

ON THE INSIDE:

Externally the Golf R is surprisingly restrained (just like it's GTI little brother) with only the massive alloys and four exhausts giving the game away.

Inside Volkswagen has liberally scattered about some R badges, the instrument needles are blue and there's some cool mood lighting which runs through the doors, but it still feels like a GTI.

The sports seats (Alcantara suede/leather in the test car) look good and provide extra grip when you're going fast. Naturally, all the switchgear operates with the kind of well-damped precision expected of VW.

The Northern Echo:

My kids appreciated the four-door bodyshell and had no complaints about legroom or the view out of the windows. The Golf R will easily accommodate four adults.

WHAT DO YOU GET:

It might look like a GTI on bigger wheels but look again and you'll spot the differences: bespoke bumpers, sills and standard bi-xenon headlights with LED daytime running lights, dark red LED rear lights and the uber cool four chromed tailpipes.

Inside there's the sports seats, a leather-trimmed three-spoke sports steering wheel, ambient lighting, illuminated sill guards, automatic climate control and a touchscreen that's more responsive than most. The Golf's sat nav proved frustrating - often dismissing ring roads and selecting more direct (but slower) routes through town centres.

The Northern Echo:

RUNNING COSTS:

It's 18 per cent more efficient than its predecessor, but don't expect low running costs - around town I was averaging less than 25mpg, although my 29mpg overall average probably reflected my, er, enthusistic driving. With a bit more restraint it should be possible to nudge the mpg over 30mpg.

The fifth gen Haldex four-wheel drive system cleverly decouples the rear wheels, helping to reduce fuel consumption, under low loads and when coasting.

VERDICT:

What a great car. The Golf R is the true heir to another fabulous VW hatch - the Corrado VR6 coupe which many critics (including me) still consider to be one of the best front drive performance hatches ever made.

For storming down the autobahn to cruising the UK's motorways in near silence and everything in-between this is a hyper hatch that's easy to live with and fun to drive.

It might not look as flashy as some but there's no doubt that R in this case stands for the Right Stuff.

The Northern Echo:

SPEC: Engine: 1984cc/4-cylinder/turbo.

Max power: 300PS.

Max torque: 380Nm.

Top speed: 155mph.

0-62mph: 5.1 seconds.

Combined mpg: 40.2mpg (29mpg on test).

CO2: 162g/km.

VED: £180.