In reply to jockster:
2002 - 2003 Citroen C3 1.4 HDi diesel might be worth a look. Nippy, 60 mpg, £30 a year road tax and the insurance isn't bad. I sold one a few months ago for £1500, good nick, still going strong with 145000 miles on it. There were others for sale between £1500 and £2k at the time.