In reply to nickinscottishmountains:
Top gear had 3 small cars on their show last night:
Ford Fiesta (1 L 3 cylinder ecomotion: 60 mpg but £17,000)
Dacia Sandero (cheap looking, best mpg from what I could see, and £7000)
VW UP! (which was cute. No idea of the cost, but seemed economical too)
just as some other suggestions.