In motoring legend the name Bugatti is perhaps the most evocative of all. Images of sumptuous town carriages and exquisite pale-blue racing cars driven by 1930s heroes in linen helmets flood the brain. The Bugatti image had it all: it was brave, beautiful and impossibly romantic.

So nobody should be too surprised that down the ages people have tried to recreate the Bugatti dream. The trouble is, the attempts have a hitherto unbroken record of turning into a nightmare. Indeed the first victim of the overwhelming desire to capitalise on the Bugatti legacy was Ettore Bugatti himself, the firm’s founder. In 1926, after 17 successful years, he decided to build a car without equal. Its name, Royale, left nobody in doubt of its intended customer. Such was the monumental expense, however, that only six were built, of which just three were sold, not one ending up with anyone with a tinge of blue running through their veins.

Ettore died in 1947 and the next attempt at resuscitation came in the mid-1950s when a new Bugatti Formula One car was built to take on the likes of Ferrari and Mercedes: it sank without trace. The original Bugatti company was bought out in 1963.

It took another 28 years before someone else was brave enough to try to milk the Bugatti heritage, this time Romano Artioli, a maverick Italian businessman. Despite building a smart new factory on the outskirts of Modena and producing an ugly but excellent car, the EB110, the company went under after just 135 examples had been built.

In 1998 another maverick, Volkswagen’s then boss Ferdinand Piech, acquired the rights to the Bugatti name. Surely Europe’s largest car maker would be able to exploit this great marque to its own advantage?

Don’t bet on it. VW’s all-new Bugatti — the Veyron — was unveiled at the 1999 Tokyo Motor Show, but getting the car from showstand to showroom has proven a phenomenally difficult process. This month came news that the car had been delayed again, despite assurances that deliveries would start in April this year. Bugatti now says none will be delivered until late 2005.

In its five-year gestation the Veyron has created a legend of its own — for superlatives. At 1m euros (about £670,000), it will be the most expensive new car ever. It should also be the fastest production car — its 1,000bhp should allow it to reach 62mph in 2.9sec, 186mph (300km/h) in 14sec and give a top speed of 252mph, or around 40mph faster than any Formula One car has ever gone. Power comes from an 8 litre engine with 16 cylinders and no fewer than four turbochargers.

Perhaps it’s not surprising, then, that with every delay and hiccup come a flurry of rumours that VW has bitten off more than it can chew.

Rumours of aerodynamic instability were not helped when one of the test mules crashed at considerably more than 200mph. There have been tales of problems cooling the engine and problems with the steering. Then came the first public demonstration, which again didn’t go quite to plan. The car took centre stage at the Laguna Seca race track, California, at an event celebrating classic Bugattis on August 16 2003.

On the first demonstration lap Bugatti’s test driver revved the massive engine to give the crowd a thrill, only to swerve off the track into a gravel trap, narrowing avoiding crashing into the concrete track wall. He was able to reverse out and complete the second demonstration lap — but did so at a far more modest speed.

Bernd Pischetsrieder, chairman of Volkswagen, tested the Veyron last summer and was reported to be concerned about handling. Then a rash of stories appeared in the world’s press reporting that the Piech-appointed boss of Bugatti, Karl-Heinz Neumann, had been dismissed. This was quickly rebutted by VW, but by the end of last year he had decided to retire and was replaced by Thomas Bscher, a wealthy German banker cum racing driver.

And now, even though all the problems outlined above have been resolved, Bscher says that “problems with the package” have caused the latest delay. Lack of space means that on the test cars hydraulic pumps have been positioned beneath the seats — an “emergency solution” that the team are not satisfied with for the production models.

Delays and subsequent rumours haven’t been helped by the background at VW. The group has launched a £1.3 billion costcutting programme and last month reported a 62% drop in profits. European sales of the new Golf have been slow and the Phaeton is selling less than VW’s worst-case-scenario predictions, prompting analysts to question the sense in continuing to plough money into the Bugatti.

And while only a company with the resources of Volkswagen could contemplate making such a car, this very fact brings problems of its own, as Bugatti’s Georges Keller explains: “The reason the car’s introduction has been delayed is because of the requirement for it to pass the same durability tests as all other Volkswagen products, however small and mass-produced.”

VW’s test procedures are thorough to say the least. For example new engines for all its cars are put on a test bed with a metaphorical brick on the accelerator and left there, spinning at maximum revs, for more than three weeks. If the engine breaks, you start again. That’s some challenge for a 55bhp motor from a Polo, let alone a Veyron with 20 times the power.

What it will mean when deliveries finally start is that the car, in theory at least, will be as reliable as a Golf. In the meantime Bugatti must be fearing that those who have already put their hand up for the Veyron are losing patience. Keller refuses to put a precise figure on the number of orders the company holds but admits that it is less than half the 50 that have been quoted by the press.

A more optimistic view comes from Nick Lancaster, chief executive of HR Owen, which was the sole UK importer for Bugatti in its 1990s manifestation and is now involved in sales of the other upmarket brands that VW has bought, Bentley and Lamborghini.

“I know of nine or 10 individuals over here who are desperate to get a car and have the means to do it,” says Lancaster. “They may not have ordered one yet but that’s simply because they are waiting to find out when it will be available.”

When that will be remains open to question, despite Bugatti’s suggestion of late 2005. “I expect it will be 2006 at the earliest, and late 2006 at that,” was the gloomy prediction of one well informed source.

Come what may no more than 300 Veyrons will be built (excluding the 13 prototypes that already exist but will not be sold).

And what of the idea of a 250mph road car? There is perhaps no one better placed to speak out in defence of the concept than Gordon Murray, designer of the 10-year-old McLaren F1 which with a proven top speed of 240.1mph (set, ironically, on VW’s test track) remains fastest by far of any road car to date.

But Murray declines the opportunity to defend it. “The Veyron is a stupid car,” he says emphatically, “and a shocking waste of an opportunity. Of all the things that could have been done with the Bugatti name, to concentrate on top speed alone, with all the compromises in weight and size and packaging this brings, is simply pointless. When we created the F1 we didn’t know its top speed, it just did what it did. It was never the point of the car. We wanted to create a lightweight car of compact dimensions that you could see out of and really use. They seem to care only about beating the F1’s top speed.”

And will it? Murray is in no doubt. “Despite its size, weight and frontal area, if it’s got 1,000bhp it will do more than 240mph.” And that, even if only from an academic point of view, will be an event worth waiting for.

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