Although prices have been reduced in Japan, and one existing model carried over, Toyota GB is holding current on-the-road prices for its third generation Prius T3 and T Spirit models while boosting the specification and price of the top T4 version.

It said the strategy "represents exceptional customer value, with new Prius offering significantly stronger performance, lower emissions, improved fuel economy and substantially higher standard equipment levels".

Prices will start at GBP18,370 on the road when sales start in August. Honda's new rival Insight begins at GBP15,995 here.

Entry-level T3 models have gained a new head-up display, projecting key vehicle data on to the windscreen in the driver's eye line, new 'touch tracer' multi-function control on the steering wheel, smart entry & start, driver's knee airbag, heated door mirrors and front fog lamps.

T4 grade models get all that plus 17-inch alloy wheels, Bluetooth, eight-speaker audio system, rain-sensing wipers and an enhanced smart entry & start system. The price is up GBP835.

T Spirit models add hard disk drive navigation system and music library facility plus an improved intelligent park assist with rear parking camera.

The new UK specification Prius has 24% more power, faster to 100km/h/62mph and CO2 emissions have been slashed to a market-best 89g/km while fuel consumption has improved by 10% to up to 72.4mpg in official EC testing (in practice, owners of the previous model rarely achieved these 'official' figures, leading to some controversy).

UK owners will pay no VED road fund licence charge; enjoy the lowest rate 10% benefit-in-kind company car tax; 100 per cent first-year corporation tax write-down allowance; and exemption from the central London congestion charge.