Sometimes something comes along at just the right time and captures a mood. Like Tony Blair a decade ago. Or the Peugeot 205 GTi in 1984.

Invented for young people in a hurry, it became a bestseller and inspired a whole new generation of car. The year of its launch, Britain was still mired in post-1970s gloom. The miners went on strike, one in 10 had no job and Sting and the Police split to pursue solo careers.

The most exciting British car around was the MG Maestro. Only it wasn’t that exciting. It used parts from the Maxi, including the E-series engine, an old cast-iron upright dating back to 1969. British Leyland tried to soup it up by sticking on an MG badge and giving it a talking dashboard that said things like “low on fuel”. It should have said “drive me to the scrapheap”.

The 205 GTi roared up like a powered rollerskate. It had a fuel-injected 1.6 litre engine, lightweight chassis, big alloys and low-profile tyres before the term was invented. Admittedly its 105bhp seems puny by current standards but it was enough to push it to 62mph in 9sec, which was fast by the standards of the day. Three years later Peugeot consolidated its lead over rivals by bringing out a 130bhp 1.9 litre version. Which I’m pleased to say, fresh out of university with my first job, was the first new car I owned.

Then, as quickly as it became popular, Peugeot lost its halo. European Union regulations didn’t help. Peugeot was forced to detune the 1.9’s engine to 122bhp and it was never quite the same car. But the company’s biggest mistake was strategic. It tried to keep pace with owners as they moved from hot hatches into worthy but dull family cars. The result was a lot of flabby metal with not very exciting engines.

So what a relief it is to be able to say, 20 years on, that the 205 GTi’s successor, the 207 GTi, is just as exhilarating as its forebear. The credit for putting back the flair goes to Gerard Welter and his team of Peugeot designers. Welter started with a blank sheet of paper. Then he got the original magazine advertisement for the 205 GTi and stapled it on. It showed a motion-blurred GTi on a snaking road with the caption: “If you want something sensible, buy an anorak.” That summed up better than any performance data why the original 205 was an instant success.

If anything, the new car is tauter, it grips harder and there’s more torque (so much so that you can steer through the tightest hairpins in the hills above Nice in third). Nothing can match getting behind the wheel of your first bought-and-paid-for car, of course, but the ghost of the 205 is definitely in the machine.

True to its heritage, it is still a four-cylinder, front-wheel-drive car with a five-speed gearbox and electronic petrol injection, but with two decades of technological advances.

The 1.6 litre engine has been turbocharged to 175bhp and will now push the 207 to 62mph in 7.1sec. The car sits on chunky nine-spoke alloys reminiscent of the 205’s but now it comes with bigger ventilated discs that pull you up more sharply. Peugeot has added all the things it would have included had they been available in 1984: headlamps that switch on when it gets dark, auto windscreen wipers with rain sensor, and a Blaupunkt five-CD changer instead of the old compact cassette player that ate Bruce Springsteen tapes.

The old GTi had the distinction of being one of the most stolen and therefore most crashed cars in the history of motor insurance. In a collision, the engine usually ended up on the driver’s seat. It had no alarm or deadlocks and the spare wheel was in a cradle underneath, from where it was easily stolen. The new version has a five-star Euro NCAP rating with six airbags, proper security and antilock braking. It’s also got air-conditioning and power steering.

Possibly Peugeot has overloaded it. The brochure says it has EBFD, EBA, ASR and CDS — electronic protection systems that prevent you pushing it too far in the bends. I couldn’t work out whether something called the steering stability program, which it also features, is covered by these initials. Regardless, you can turn them all off with a single button and slide it nicely round some mountain switchbacks.

All the extra gadgetry means the new car weighs more than 2,750lb compared with the mere 1,930lb of the original 1.9. But the extra torque more than compensates. If you accelerate hard the turbo works harder (a feature called overboost). For engine tweakers there’s a more exciting prospect. The engine in the 207 GTi is the same as in the Mini Cooper S — built as a joint venture between PSA, Peugeot’s owner, and BMW, the Mini owner — so the kind of modifications available to push the Cooper S’s power to 200bhp and above will work just as well on the Peugeot. The company has anticipated this and plans to bring out a production 210bhp version next year.

The 207’s main rivals (aside from the £15,485 Cooper S) will be the Clio Renaultsport 197 (£15,995) and the Focus ST (from £17,995). At £14,995, the Peugeot looks like a bargain.

That said, there are things I missed. The Mini has a six-speed gearbox. Peugeot says it’s not necessary, but more probably the reason is cost. The GTi beats its rivals on price largely because it uses the 207 platform with only a few modifications.

One other thing: the new version I drove in France had no GTi badge on the steering wheel. As every boy racer knows, this is vital to remind you of your sporty edge, especially when you’re stuck in traffic. Peugeot has promised to rectify this with a badge on the lower spoke of the steering wheel of the UK version when it is launched in June. Peugeot reckons it will sell 1,000 a year — doesn’t seem many for a classic.

Why has it taken the company so long to get back on track? Maybe it took years to shake off its boardroom ennui or maybe it was as Sting said when the Police recently got back together after more than 20 years apart. “It was a long time to wait but now just seemed like the right time.”

Vital statistics

Model Peugeot 207 GTi THP 175

Engine type 1598cc, four cylinders, turbocharged

Power/Torque 175bhp @ 6000rpm / 195 lb ft @ 1600rpm

Transmission Five-speed manual

Fuel/CO2 39.2mpg (combined cycle) / 171g/km

Performance 0-62mph: 7.1sec / Top speed: 137mph

Price £14,995

Verdict The spirit of the 205 GTi, with some fancy frills

Rating Five stars

Date of release June 2007

The opposition

Model Mini Cooper S £15,485

For A ball to drive

Against Pricey if you go for full-spec version

Model Renault Clio Renaultsport 197 £15,995

For Tight and action-packed

Against Can’t quite shed Nicole/Papa image