Italy saluted a national icon yesterday when the Fiat 500 was relaunched on its 50th birthday with a blaze of nostalgia.

The small, blunt-nosed car symbolises for many Italians the postwar years of economic boom and the dolce vita. Fiat hopes that its new incarnation will consolidate the once ailing carmaker’s recent revival.

The launch in Turin was attended by the country’s elite – Romano Prodi, the Prime Minister, and six Cabinet ministers, captains of industry and showbusiness stars. The show was choreographed by Marco Balich, who staged the spectacular opening and closing ceremonies at the Turin 2006 Winter Olympics.

With the iconic original Cinquecento raised on a giant floating platform in the River Po in the city centre and “skyscrapers of light” reaching upwards, the new version was unveiled to fireworks, acrobats and a concert by the American singer Lauryn Hill.

“The new Fiat 500 will be the iPod of cars,” said Sergio Marchionne, the Fiat chief executive officer. The original Fiat 500 went out of production in 1975.