To a bunch of engineers sitting around a table looking at slide rules, giving the all-new MINI hatch a three-cylinder engine made perfect sense. It could generate great economy numbers, for starters, it was lighter and a turbocharger would make it every bit as strong as the outgoing 1.6-litre four cylinder engine.

Yet it was very clearly a risk and it didn’t make such perfect sense to the marketing and sales people who had to go out and convince people that less was more. MINI won the Monte Carlo Rally in its heyday, so people expect some enthusiasm, performance, smoothness and sharp throttle response and most three-cylinder engines we’ve seen didn’t meet those expectations.

That, and the percentage of Irish drivers with any experience of three-cylinder engines is very, very small. It’s new territory for most MINI targets.

Most three-cylinder engines, however, don't share their core architecture with the BMW i8 hybrid sports car's petrol motor, and that should have given us a hint that this new, 1.5-litre three-cylinder motor, code named the B38, is very, very good.

It’s not the only development in the all-new MINI hatch, which is longer, wider, taller, slightly heavier and has a longer wheelbase than the car it replaces, but it was the area of greatest concern for most and it is a standout for how brilliantly it alleviates those concerns.

MINI wanted this engine because it’s about 15kg lighter than the outgoing 1.6-litre four cylinder, develops 10kW more power, 60Nm more torque over a far wider range and makes the Cooper faster and far more economical.

Where the old engine’s power peak hit at 5500rpm, the turbocharged three pot’s power peak chimes in at 4500rpm and stays until 6000rpm. Where the old four cylinder’s torque arrived at 4250rpm the three pot’s torque peak hits at just 1250rpm and stays in a flat plateau until 4000rpm. It’s effectively the same engine as the new Cooper S’s 141kW, 280Nm, 2.0-litre four-cylinder engine, just with one cylinder cut off the end.

It makes it an easier sell when it’s faster. Where the old motor, with the manual gearbox attached, took an entire 9.1 seconds to hit 100km/h, the new one manages it in 7.9 - and the six-speed auto’s sprint slashes 2.6 seconds off its predecessor to claim the Cooper prize at 7.8 seconds.

And, most convincingly, where the old motor’s NEDC economy figure was 5.8 litres/100km in the manual version, the new one delivers 4.5, while the automatic version is, at 4.7 litres/100km, a full 2.0 litres/100km better than the old one. It’s helped by the first MINI start-stop, obviously, but it’s also inherently very frugal and, unlike Fiat’s TwinAir two-cylinder motor, that’s at least partly because you don’t need to wring its neck everywhere to make it go.

So there’d have to be pressing reasons not to give the Cooper the turbo, direct-injection, variable-valve timed B38 engine, but there aren’t any. It’s not just a step up in power, performance and economy because, counter-intuitively, it’s a huge step forward in refinement as well.

It sounds terrific, all crisp and deep, it has throttle response to burn and it’s instantly charming. Even better, it charges willingly from very low engine revs, even up steep hills in sixth gear. It has such a performance advantage over its predecessor that you can run the new Cooper a gear, even two gears higher than the old Cooper and it will pull away with at least the same speed. From as little as 1500rpm, the Cooper shows genuine straight-line interest and initially prompts some raised, disbelieving eyebrows, such is its willingness, yet it’s willingness without obvious exertion.

There are, essentially, none of the expected noise, vibration or harshness fingers to be pointed at the tiny engine and the only time you’ll get a hint that it’s not an inherently silken thing is when you see it wobbling all over the place at idle when the bonnet is up.

It’s then that you also realise how tiny the thing is, with each of the Cooper’s new, optional full LED headlight units almost as long as the motor itself.

This is the first car in the BMW family to carry the new three-cylinder engine, but it’s not the only significant new thing here. Everything about the MINI is new, from its all-new chassis architecture to both its six-speed manual and six-speed automatic gearboxes. The car now gets aluminium steering knuckles, a sharper electro-mechanical steering setup and its four-link rear suspension has been completely revamped, which helped the handling, but was largely done to boost the capacity of the false-floored luggage area from 160 litres to 211 litres.

It achieves both aims, because the Cooper rides with a level of initial bump-strike compliance that belies its outright grip abilities and its rear end is now the most secure part of the handling package. The next trick MINI pulled is that the Cooper doesn’t conquer these goal conflicts by feeling nose heavy, but it instead makes the rear end feel flat and incredibly well planted, even when it’s being thrown around with all of its electronic safety nets switched off.

One of the keys here, chassis development head Martin Gruber admitted, was that the new architecture naturally gave a more compliant ride anyway, so they could chase more grip without losing any comfort. It's the sort of comment you normally dismiss as media-schooled bunkum, but in this case it's eerily true.

The Cooper flits from corner to corner and across broken ground with more initial compliance and comfort on bumps than the faster, four-cylinder Cooper S manages on its optional active damping setup, and the cheaper car feels capable of carrying more corner speed in lumpy country because of it. The steering isn’t a highlight, but it’s effective, and MINI has almost - but not quite - eliminated the torque steer that has often plagued the species.

It’s a lot quieter inside than its predecessor, too. And larger, with a decidedly airy feel. And more comfortable. The instrument cluster now hosts the speedo and tacho on a pod on the steering column, while the new multi-media screen is 8.8 inches, but seems far larger and is surrounded by a ring of 17 LED lights that change colours from red to blue to green to purple to white to yellow to blue depending on (at your choice) your revs, your driving mode, your throttle input or just because you think it’s pretty.

There are imperfections, though, and they largely centre on how initially difficult it is to navigate the multi-media screen’s dazzling menu array. It gives you a lot of options and you’d probably find it pretty useful and full of curiosities over a life of ownership. It’s more difficult in a day, though.

The fold-down armrest also always seems to be in the way most of the time and there just isn’t enough odds and ends storage in the (much-larger) cabin. There are two cupholders in front of the gear lever, a small tray in front of them and that’s about it, because the door pockets are tiny and nearly pointless. On the upside, the boot is much larger now and finally delivers a practical shape, with a deep floor, a false floor that sits at the bumper height, netting on the back of the split-fold rear seats and hooks aplenty.

All in all, it’s a job very well done and many pitfalls are artfully avoided. And if the three-cylinder petrol MINI Cooper is this good, how good will the three-cylinder, turbodiesel Cooper D be?

Lowdown: 2014 MINI Cooper hatch

Engine: 1.5-litre three-cylinder turbo-petrol

Output: 100kW/220Nm

Transmission: Six-speed manual

Fuel: 4.5L/100km (combined)

CO2: 105g/km (combined)

One sale in Ireland: From March 15th

Prices: MINI Cooper from €22,530

MINI Cooper S from €28,030

MINI Cooper D from €23,830

What we liked:

- Strong, smooth engine

- Planted handling feel

- Quiet, compliant ride

Not so much:

- Clunky multi-media menus

- Still no cabin storage space

- Armrest always in the way