There has never been a faster way to beat the London congestion charge. The Koenigsegg CCXR Edition, which made its UK debut this weekend at the MPH motor show in Earls Court, west London, claims to be the fastest European production car of all time. And because it runs on bioethanol, it qualifies for exemption from the congestion charge. I suppose every little bit helps, given that the CCXR costs a breathtaking £1,197,426. Plus Vat.

What an utterly amazing machine you get for the money, though. Clothed entirely in carbon fibre, the CCXR deploys a 4.8 litre twin-supercharged V8 that develops 1,004bhp, enough beans to hustle the car to 62mph in just 2.9sec.

Top speed is quoted at 254mph-plus, which, if correct, is just the tiniest bit faster than the mighty Bugatti Veyron.

In fact the Bugatti and CCXR are so closely matched on power and speed that this would be the most epic drag race of all time.

What’s with the bioethanol fuel, though? Who, after all, expects a million-quid hyper-car to be environmentally friendly? I asked Christian von Koenigsegg, the founder of this small Swedish outfit, what was behind the idea.

“Well, we have been using E85 [85% bioethanol, 15% petrol] in Sweden for years, and through our own engine development we have good insight into what this fuel does for engine characteristics,” he said. “It affects power output in a positive way and the environment in a positive way, so with two positive effects, why not do it?”

True enough, bioethanol improves engine performance because ethanol helps to cool the combustion chambers while providing a higher octane rating.

That enabled Koenigsegg to liberate 1,004bhp from the car’s V8, thereby propelling it into Bugatti territory. However, Koenigsegg isn’t making any ridiculous “saving the planet” claims about his alternative-fuel supercar.

“The reality is that with such low production numbers - we make 20 cars a year at the moment - we’re not going to have any impact on the environment. It is just a statement to say that if a small company like ours can engineer such solutions, large manufacturers can do it too.”

For the record, when a CCXR is run on E85 it emits 135g/km, which is less than a Ford Ka 1.3. Run on full-fat petrol, the CCXR would emit 368g/km, which is about the same as a supercharged V8 petrol Range Rover.

There will be only six CCXR Editions built, and apart from that gorgeous unpainted carbon fibre body (you can spend an age poring over its intricate weave), each car sports a rear-view camera, an oversized front splitter and an adjustable rear wing. Oh yes, and a leather interior.

Koenigsegg claims that the aerodynamic modifications have increased downforce to nearly half a ton once the car reaches 157mph. That’s probably not unrelated to the company’s embarrassment when, a couple of years ago, Top Gear’s Stig managed to crash a CCX on the track when its aerodynamics failed to keep it nailed to the ground through the fast corners.

And just for good measure, Koenigsegg claims the CCXR Edition can generate 1.5G of lateral cornering force. Which is a lot.

It’s true that the depth of engineering that goes into the CCXR is hugely impressive. The car’s technical specification reads more like that of a Formula One racer, with an aluminium honeycomb chassis, hollow drive shafts for weight-saving, Le Mans-spec bearings, ceramic disc brakes and traction control with no fewer than five modes.

And the result isn’t just an impressive top speed and a mesmerising 0-62 sprint. Here is a car that will go from zero to 124mph and then back to zero in 13.5sec. All that in the time it takes many cars just to reach 60mph.

Five of the six CCXRs have been sold, including the one on static display at the MPH show, which is the only right-hand-drive example built.

Koenigsegg isn’t too worried about the future of his sales. “We’ve had no problem with the credit crunch. The world might be getting smaller, but it’s still a pretty big place and, with just 20 cars a year, we have no trouble finding customers for all of them.”

In the end, though, there really is just one question that we all want answered. Koenigsegg claims that this is the fastest European production car so far, but until it squares up to the Bugatti Veyron, we’ll never know for sure. However, if I were betting, I’d put my money on the big Swede.

- Total downforce of half a ton at 157mph is like having a horse sitting on top of your car. Doesn’t bear thinking about

- You will need to watch those sleeping policemen as ground clearance is less than 4in

- The CCXR’s glass roof is removable for that wind-in-hair moment. It stows under the front boot lid

- The CCXR’s front-to-rear weight distribution is an ideal 45/55

The interior is luxurious, with leather carpets, DVD player, sat nav, iPod connection and a rear-view camera

Hot Wheels specs

ENGINE 4759cc, V8
POWER 1,004bhp @ 7200rpm
TORQUE 782 lb ft @ 6100rpm
TRANSMISSION Six-speed sequential
FUEL / CO2 12.8mpg / 135g/km
ACCELERATION 0-62mph: 2.9sec
TOP SPEED 254mph
PRICE £1.2m plus Vat
TAX BAND C (£120 a year)
VERDICT Fastest European production car yet? Maybe