Britain's most traditional sportscar maker is starting to flex its muscles. A 160mph supercar, the Aero 8, now heads its line-up, bringing the Malvern maker well and truly into the 21st Century.

This £55,500 flagship model is still of course a Morgan through and through. Which means it's hand built to order, although the wood is now only for show rather than being a structural element. Under the bonnet however, lies a far more potent engine than anything the British company has offered in the past. The 286bhp 32-valve 4.4-litre V8 is borrowed from BMW's 540i sports saloon and in this form, takes the Aero 8 from rest to sixty in just 4.9 seconds on the way to around 160mph.

Unlike the Bavarian super saloon, however, there are no sophisticated stability systems to keep all that power in check. A six-speed manual Getrag gearbox sends drive to the rear wheels, so drivers will need to have their wits about them if conditions are damp. Not that Morgan have been blind to advances in technology: a satellite navigation system is listed amongst the options.

Called Aero 8 as a homage to the three-wheeled racing model introduced in 1919, the car is based around an advanced bonded and riveted aluminium chassis. The aerodynamic bodywork's aluminium too, honed apparently in a wind tunnel for a 40% reduction in drag over the existing Plus 8 (which continues). Other aerodynamic benefits include a flat undertray to improve the airflow beneath the car and a venturi to reduce potential lift at the rear.

"More potent than anything the British company has ever offered before."

The Aero 8 development programme was the largest ever undertaken by the Worcestershire manufacturer in more than 90 years of sportscar manufacture. The four year project was set in motion following the development of the works GT2 racer, which competed in the 1997 FIA GT Championship. Many of the engineering and design principles behind the Aero 8's chassis and suspension were both conceived and proven on the world's race circuits by the GT2 car.

That GT2 car was the brainchild of Morgan Managing Director Charles Morgan and was brought to life through the engineering expertise of Morgan's 1962 Le Mans class winner Chris Lawrence. The bodyshell comprised mostly standard Plus Eight panels but was based on an aluminium chassis. Though competitive in performance terms, the GT2 lacked the aerodynamic shape to achieve real success in racing.

All of which set the small but dedicated Malvern development team thinking. In 1998, they built the first Aero 8 prototype, even sleeker than the GT2 racecar but this time intended for the road. "The objective of the development programme was to recreate the position we held in 1968 when we first launched the Plus Eight," says Charles Morgan. "At that time, it was the car with just about the most flexible performance you could buy, due to the combination of its light weight and large capacity engine. We believe we have achieved this again with the Aero 8 through our dedication to weight saving and its development as an aluminium intensive vehicle."

Aero 8 prototypes have completed thousands of miles of extensive testing, both at BMW's advanced facility in the South of France and at other locations throughout Europe where hot weather testing was conducted at temperatures in excess of 40 degrees C. At every stage, Morgan claim that the Aero 8's performance, ride, handling, cabin noise levels and passenger comfort were benchmarked against the competition.

High performance features include the Aero 8's 18" cast magnesium alloy wheels made by OZ Racing and currently the lightest five-spoke alloys available for a production car. Front and rear cast iron ventilated disc brakes are designed and manufactured by AP Racing to Morgan's own specification and the suspension system includes springs from F1 supplier Eibach and shock absorbers from Koni. This car is also amongst the first to boast foam fill run flat tyre technology, provided by Dunlop SP Sport tyres and combined with an internal warning system to alert the driver should any tyre fall below 20psi.

Inside, the Aero 8 is claimed to be the most luxurious Morgan ever - as you'd expect for £55,000, around £20,000 more than the Plus Eight. All the glass areas (front and rear, Plus electrically operated side windows) are heated using invisible heating elements to give clear vision and rapid all-round demisting and defrosting. Air conditioning is available (unbelievably, you have to pay extra for this and your choice of stereo).

Still, at least the interior makes you feel rich. There's extensive use of hand-stitched Connolly leather and bare aluminium - and you can even see the hardwood ash frame in certain exposed areas. A removable Mulberry leather case (large enough to carry a laptop computer) figures in place of a conventional glovebox. Behind the driver, there's a lockable luggage area with remote release big enough to take a standard set of golf clubs thanks to the fact that the run-flat tyres negate the need for a spare.

The double-skinned hood meanwhile, has been completely redesigned so that two easily-managed latches operate it: customers of lesser Morgan models will hope that this soon replaces the fiddly system currently fitted across the rest of the Range. Morgan say that the aerodynamics of the car remain virtually unchanged whether the hood is raised or lowered, so there's very little wind buffeting when travelling with the top down.

The company is only expecting to build around 200 Aero 8s a year, with customers already on their waiting lists given preference in what will undoubtedly be a long queue. If you want one then, you'll need to be patient - and forgiving. Don't expect this to be a TVR or a Porsche: like everything Morgan makes, the Aero 8 is very different from its rivals, a difference you'll either like or you won't. Very quickly.