I DON'T know how they do it, but Jaguar always manages to pull something special out when it really matters.

The XK120 was nigh on unbeatable when it appeared in 1948, the C-Type won Le Mans twice yet you could buy one for the road -- in 1951, remember -- the XKSS came about because the company had a pile of unsold D-Types, while nothing further needs to be written about the classic Mk X and the iconic E-Type, the car that defined a generation.

Fast forward to 2009. We're in the middle of the worst economic downturn for a century, the motor industry is on its knees and, blow me, if Jaguar hasn't gone and done it again.

The XF saloon is so much better than the car it replaces (the unloved S-Type) that comparison is as ridiculous as it would be meaningless.

No this XF is good enough to trade punches with the BMW 5-Series, the Mercedes E-Class and the Audi A6 - and match them blow for blow.

In fact, until now the only thing that's really held the XF back was the lack of a genuine top drawer diesel engine to sit beneath that muscular bonnet.

Interestingly, the twin-turbo V6 that powers the XF D is a heavily breathed-on (and bored out, up from 2.7 to 3.0) variant of the V6 diesel originally fitted to the S-Type.

Of course, that engine was just about the best thing in the old S-Type. It was whisper quiet, quick and frugal at the pumps.

It was also crying out for a better car than the S-Type.

And now it's found one.

The XF V6 comes in two power and torque options: 236 or 271 bhp with 368 or 442lb ft of torque, put through the rear wheels via a six-speed automatic transmission. And it's all available from just 2,000 rpm, a point where most petrol engines don't have the torque to pull the skin off a rice pud.

The secret of the hefty power output is sequential turbocharging, where a small turbo spins up quickly for plenty of off-idle poke then gives way to the main event, a larger turbo the size of a football that provides the puff at higher revs and maximises power without the usual off-boost lethargy single turbos produce.

And it is devastatingly quick. The higher powered version can hit a top whack of 155 mph (more if it hadn't been electronically "limited") and races to 60 mph in 5.9 seconds - that's serious performance and yet the XF D still manages to stretch a gallon of DERV more than 30 miles.

In fact, having driven the diesel I can't see why anyone would go down the petrol route. Certainly, if you crave more performance then you really shouldn't be driving on public roads - the race track's the place you'll be wanting, squire.

The diesel doesn't give much ground in terms of refinement, either. At most speeds, even starting up on a chilly morning, on a very sensitive ear would discern a spot of diesel rattle. I'll be honest - I couldn't hear any at all.

Nor does the diesel feel any less smooth or less willing to rev out than its petrol-powered cousins. It's an incredible achievement that instantly puts the XF D into the very top drawer of high performance diesel prestige saloons.

Jaguars have always offered a superb ride. Despite wearing massive 20-inch alloys the test XF rode over badly surfaced roads with the aplomb of a limousine, yet the pillow-like ride doesn't translate into wallowing when you up the ante a bit.

It weighs almost two tonnes, yet feels like a much smaller and lighter car with great steering and excellent feel through the brake pedal.

Mind you, it's a big car and feels like one when you're in town. Parking sensors and the rear monitor are definitely a good idea if you don't want the costly expense of a reversing ding once in a while.

Then there's the interior with its gear selector which glides up out of the raised centre console and the automatic air vents that swivel open when you press the starter button. It's great theatre and, for a sense of occasion even if you're only popping down to the shops, there's nothing in this class to beat it. Step forward and take a bow Alistair Whelan, the Brit designer who made it all happen.

So it's the grandest of grand tourers, then, with space for four adults to travel in hedonistic comfort and a boot that's both wide (a Jag trademark) and deep (not a Jag trademark).

Without the XF Jaguar would be in critical care this recession. The new XJ isn't here for a few months yet, the X-Type has finished and the market for sports cars has tanked.

Yet with the XF Jaguar has a financial backstop. The overall prestige market has taken a beating, yet sales of the XF - and the diesels, in particular - are holding up very well indeed.

In fact, depending on your maths and whether or not you count estate car sales, the XF is currently the market leader, pushing even the mighty 5-Series into second place.

And with a car as good as the XF D - a splendid tourer that blurs the distinction between performance and fuel economy - it has every right to.

SPEC: Engine: 2,993cc Max power: 271 bhp @ 4,000 rpm Max torque: 442 flt lb @ 2,000 rpm Transmission: six-speed automatic with paddle shifters on the steering wheel Top speed: 155 mph 0-62 mph: 5.9 seconds Combined official fuel economy: 30 mpg CO2 emissions: 179 g/km Equipment: Electric windows, mirrors, climate control, CD with digital TV and DAB radio, satellite navigation with touch sensitive screen, park distance radar and colour screen monitor, 20-inch alloys, leather seats.