When Panasonic announced it would be updating its popular Lumix FX33, our mouths began to water (lack of food does that to you). And just a couple of months ago the eagerly awaited flagship for its premium ultra compact models was released, the pretty Lumix FX35.

But what does this new top of the line digital camera offer that would make you want to splash out a couple of hundred pounds. Lets take a closer look at one of if not the best digital camera.

Let's start with the price. At around £180, its certainly cheaper than what most of us expected. It has an RRP of £300 but we found it for under £200. You can even get a free memory card and a proper Lumix case. Sounds good, we know but click here to see it. Compared with the best premium digital compact cameras from other brands, its far better value. The Nikon Coolpix S600 is around £230 and the Canon IXUS 860 IS is hovering around the £250 mark. Only one that comes close to in price is the Sony Cybershot W170 which is around £190 but its not one we were best pleased with in testing. A full review will be forthcoming.

So what have the boffins at Panasonic been up to. They've certainly been busy upgrading all of the FX33 's key featuring in making the sexy Lumix FX 35 - best digital camera for some time.

The ever popular FX 33 had a 3.6x zoom lens with a 28mm wide-angle. But the new FX35 has a 4x zoom Leica lens (they've really killed the opposition with this lens) with a wide-angle setting equivalent to 25mm. Must be the widest on any current compact digital camera. Panasonic didn't forget the sensors, oh no. On the FX 35 its been upgraded from 1/2.5-inch and 8.1 mega pixels to 1/2.33-inch and 10.1 mega pixels - very nice indeed. It doesn't stop there. The LCD monitor has been beefed up too. It's still 2.5 inches, but is now much sharper with 230,000 dots - certainly noticeable when reviewing images on the Lumix camera.

Its still a pretty camera, sexy you might say (again). Its effortlessly slim measuring just 94.7 x 51.9 x 22.0 mm and weighing just 125g without the battery and card. Incredibly, this is lighter than the Lumix FX33. With its all metal body (matt black is the ones to go for) and its pocket sized all metal body, its the perfect digital camera to take with you where ever you desire. But what does it take to be the best digital camera around.

The Lumix FX35 is a powerhouse of a camera and the headline feature is without a doubt that extra-wide-angle minimum zoom setting. Most digital compact cameras have a wide angle, typically around 35mm, which is absolutely fine for general snapshots. An increasing number however are featuring 28mm equivalent settings, widely thought of as the start of true wide angle photography. The FX35 has a minimum zoom setting equal to an even wider 25mm though. Its unbelievable what a difference those 3 little millimetres make. The horizontal angle of view is now approximately 71.5 degrees on the FX 35, compared to 65.5 degrees for a 28 mm lens or 54.4 degrees for 35 mm. All of a sudden you can quite easily fit half the room into the frame, where as in the past you'd struggle.

The beautifully crafted Lumix FX35 is brimming with advanced automatic features which help produce good pictures in almost any circumstances. As well as the usual program auto mode, it also features an improved version of the Intelligent Auto mode (iA) introduced with the FX 33. This is when Lumix camera automatically selects the optimum scene mode, metering mode and ISO setting for the situation (helpful little camera). Some of the iAuto function can be selected individually. You can do this via the menu when in program mode.

The FX 35 also features Panasonic's much admired Mega OIS system. This is essentially a mechanical lens ased image stabilisation system which uses little gyroscopic sensors that detect camera movement and tilts lens elements to compensate. Its very (very) effective and provides unbelievable stability.

If all of that doesn't fill you with giddy pleasures, then Lumix FX35 also has an excellent movie mode. It can shoot 720p of high definition movies at 30fps with mono audio, with maximum recording time limited only by storage space.

The Panasonic Lumix FX35 with all its bells and whistles shows just what is possible when you get a bunch of clever clogs in one room. They've managed to squeeze an unbelievable amount of technology in a tiny camera. From its great quality and design to its fantastic wide angled lense, exceptional performance (even in low light), you can't help but admire the FX35, however cheesy that may be. If you're looking for a feature rich, top of the line digital camera with terrific performance, wide zoom and image stablisation, then you'd be crazy to buy anything other than the Lumix FX35. It has to be the best digital camera on the market and unlikely to be challenged for some time.

Guide price: £180 inc VAT