This summer sees the Olympics games splashed all over our screens: the usual display of amazing feats and endeavour continue to excite and burn themselves into the memories of those watching. Previous greats from every event are replayed in action and interviewed. Rowing for example: Sir Steve Redgrave stands alone as the ultimate athlete in his field and casts a shadow over his counterparts. This worship of past heroes is applicable to any aspect of life. Take cars, for example: can you name a great sporting saloon? Sooner or later the E30 M3 will come to mind. For nigh on 20 years it has been held in esteem by enthusiasts the world over and was good enough to consign its extremely capable E36 successor to the role of wannabe. A legacy such as this is an unenviable family to be born into, like an overachieving elder sibling the newer version must truly excel to obtain any recognition. So what hope for the outgoing M3?

The latest M3 is an imposing athlete, one that wouldn't pass the IOC's drug test. It's been on the steroids. Virtually every panel has been honed into a more rippled and bulging form of that found on lesser 3-series. The wings strain to contain the 19" rims, which in turn are filled with huge cross-drilled and ventilated brake discs. The bonnet bulges are stretched over the M-sport 3.2-litre six that sits far enough back in the chassis to be tagged mid-mounted and announces its presence via quad tail pipes. The whole package is very subtle, purposeful and just downright mean; fast, powerful and businesslike: Ben Johnson in a Saville Row suit.

Like Mr. Johnson, the M3 can certainly shift. As with Ben in 1988, the opposition have no answer to this kind of pace and it simply streaks away. The 343bhp engine bristles with technology such as variable valve timing on both inlet and exhaust camshafts, an eye pleasing set of six throttle bodies to optimise breathing and a design that allows a piston speed of 24m/s. On paper that equates to 0-60mph in 5 seconds, 100 just over 6 seconds later and a limited maximum of 155mph, which the M3 achieves with ease. On the road it translates to devastating pace.

The 6-speed manual 'box isn't the most fluent we've come across, suffering from a slightly notchy action, but its ratios are judged to perfection and enable you to utilise all of the engine's talent. At low speed in high gears you can actually feel the timing swings as the performance increases in pronounced steps. By 3000rpm the engine is pulling, the note hardens and the speedo needle arcs rapidly to 5000rpm and the urge is now just that, serious urge. The six begins to growl and the last 3000rpm to the red line is a frenzy of gnashing, wailing and howling. This is an operating region that gets the hairs on the back of your neck performing Mexican waves; one that distinguishes this seemingly docile sports saloon as not just quick, but as a member of an exclusive club of very fast cars.

All this would be of no use if the rest of the package couldn't cope. But it can, and how. Huge levels of basic mechanical grip are complemented by true poise, neutrality and body control. On dry roads at least, it possesses a level of ground covering ability that only the very focused driving machine can better, with a handling balance few others of any description can match. All this without intimidating or being snatchy or snappy. It is genuinely accessible and friendly in a way that most exotica simply isn't. The driving aids actually allow you to be ham fisted to a certain degree and combine with the forgiving chassis to flatter the driver. The M3 stays composed in all but the most extreme conditions and when it does finally break lose it constantly talks to you and remains progressive and predictable allowing grin inducing oversteer in relative safety. Progress is limited by your conscience rather than the car's ability. In the dry, you can safely turn off the traction control and enjoy your favourite road. The BMW strings bends together seamlessly, with understeer not usually an issue. Plough into a tight hairpin with a little too much speed and all you need to do is get off the brakes and back onto the power: you will be rewarded by a smooth transition to oversteer, which we found to be wonderfully controllable. In the wet, the electronics still allow you a few degrees of slip before reining the power in, but the chassis' limits are so accessible that you will soon feel comfortable driving the M3 hard, even in less than ideal conditions. It would be a cracking car to have at a wet trackday.

But this isn't at the expense of a jarring ride. Stiff yes, but compliant and tolerant of all but the most scarred of surfaces. It's a real iron fist velvet glove scenario, making the car a comfortable tourer and an unflappable back road burner. The steering is well weighted and extremely communicative. It allows you to place the car with real conviction and confidence, whilst keeping you informed of the grip available. Its resistance to tramlining is impressive considering the size of its footwear.

The brakes complete the dynamic package. A 60-0mph time of 2.6 seconds at a maximum of 1.1g is an indication of the ultimate stopping power, but not the whole story. The way the middle pedal repeatedly scrubs speed off quickly, reliably and smoothly over and over again is stunning. Some vibration is felt under light braking, which is possibly a consequence of the drilled disc surface, but this is indicative of the level of feel in the system. Heavier prods remain full of feedback but generate serious deceleration and this, coupled with a perfectly calibrated ABS system, adds up to a great set of stoppers.

The interior of the M3 is befitting of a £40k luxury saloon with cosseting leather (eye catching 'Imola Red Nappa' on our test car) stretched over figure hugging sports seats with an excellent level of adjustment allowing fine tuning to grip in all the right places. These, combined with the good range of adjustment of the wheel enable the driver to find the optimum driving position, essential in a car like this. The console mounted TV acts as the interface for the stereo, excellent satnav and TV itself, though doesn't come cheap at £2,345. Genuine four-seat accommodation for adults and their luggage bear out the true practicality of the M3. Allied to 25mpg touring, 18,000 mile service intervals and slow depreciation add further to the M3's case as a painless supercar to run.

The last two decades have seen the M3 move upmarket. Now weighing in at just over £40k it no longer trades punches with the Sierra Cosworth, but is a serious luxury sports saloon. This move up from middleweight to heavyweight is fully justified; the M3 now stands toe to toe to 911s in outright performance. As a day-to-day car suited for the urban trawl and commute the car copes admirably, belying its other abilities. As a B-road blaster it excels and as a tarmac shredding supercar scarer it really is awesome. In a family car capable of exciting, inspiring and thrilling, the £40k price tag begins to look like conspicuously good value for money. It really is a bargain in the grand scheme of things. This is a genuine four seater that reels off performance figures akin to those of a Ferrari F355. The latest M3 is an outstanding car, a great all rounder, and one that can stand with its head held high out of the shadow of the E30. If the E30 was Sir Steve, then the E46 is Matthew Pinsent; a legend in its own right, and a timeless classic.