Audi's small A3, even in its base 1.4-litre form, is an impressive car. As the S3, with a punchy 2-litre turbo driving all four wheels, it is arguably the best performance saloon in its class.

Well, there is an even wilder version now, called the RS3, but it is available only as a five-door. So is it the best hatchback in its class?

To be sure, the RS3 is the most powerful hot hatch you can buy today. Its 2.5-litre five-cylinder turbo engine produces a constant 465Nm all the way from 1,625rpm to 5,550rpm. And you get 367 horses between 5,550rpm and 6,800rpm.

This second-generation car is based on the latest A3. It boasts more lightweight materials and the centre differential has been shifted to the rear of the drivetrain to improve weight distribution.

The differential itself is specially developed for the RS3, incorporating electro-hydraulic control to apportion drive between the front and rear wheels. It is designed to respond instantly to wheelspin and will activate the differential clutch pack to send between 50 and 100 per cent of power to the rear.

Also, selective individual wheelbraking controls left-to-right traction. This is especially useful during cornering, when the inside wheel is less heavily laden and prone to spinning. The front discs, by the way, have eight-piston callipers.

The best news, however, is that it all works brilliantly. Our route with the RS3 took us on unrestricted autobahns, wet roads meandering through the Black Forest and some snow-carpeted mountain passes. Enough to discover the engine's might and the quattro's bite.

Immediately obvious was the RS3's responsive steering and front-end grip that the previous model was so in need of. Even on wet roads, some strewn with autumn leaves, the all-wheel-drive system's torque transfer quelled any understeer, allowing tidy power-on exits from corners.

With the brake-induced torque vectoring, there was no sign of traction-loss, except perhaps when aggressive throttle inputs were applied on snow-covered roads. In any case, electronic stabilisation control (which can be turned off if you have a huge frozen lake to play on) quickly intervenes to restore traction.

Audi's turbocharged five-cylinder engines have always impressed and this one - the most powerful yet - is a real monster. Its claim of 4.3 seconds to 100kmh, frankly, feels overly conservative.

In Dynamic drive mode, the engine sounds like a V10 and delivers devastating pace. Squeeze the throttle at 220kmh and the seven-speed dual-clutch gearbox shifts down a gear or two to accelerate. Which it does with urgency - even at that speed.

Top speed in standard specification is limited to 250kmh, but an optional de-limiter pack (as kitted in our test car) allows another 30kmh to maximum velocity.

As a five-door hatchback, the RS3 is a high-performer that is also roomy and practical, having comfortable seating for five in a cabin that is finely tailored with quality materials. Boot space is somewhat reduced, though, because of the rear-wheel drivetrain, but the rear seats do fold to increase goods-carrying capacity.

But the coolest part of the car is definitely its engine. It is the best you can find in any hatchback today.

•The writer is a contributor to Torque, a motoring monthly published by SPH Magazines.