LOOK very closely and you'll find Mercedes-Benz has quietly slipped a revised E-class onto the market.

Although the company tells us more than 1800 changes have been made to the car, it's obvious most of them have been made to things that can't be seen. That's a good thing - better to spend update money improving the way a car works rather than the way it looks.

So even though the latest E-class presents a slightly lower, more tapered nose to the world - set off by smart new bumpers front and rear - what's important is that it is safer actively and passively, is better equipped and adds an impressive new 2.7- litre five-cylinder turbo diesel to the lineup.

This new engine replaces the previous six-cylinder 3.0-litre turbo diesel and boasts some impressive figures: It produces 125kW (down just 5kW on the 3.0-litre) and a prodigious 400Nm of torque beginning at just 1600rpm.

All new E-class models also get the Mercedes ESP (electronic stability control) system as standard, as well as "window" side airbags and a new tiptronic-style automatic transmission control system.

Mercedes has even done some work on the E-class structure to improve its passenger-saving ability in an accident. Various load bearing members have been strengthened and there's a new floor pedal strut designed to reduce intrusion of the front wheel into the cabin in an offset crash.

The comfort factor has been addressed with a multi-function steering wheel (similar to the S-class), power seat adjustment, a new sound system and revised interiors with new wood trim and fabrics.

In addition to the new grille and bumper treatment, the E-class also now gets S-class style repeater lamps built into the rear view mirrors, body-colour door handles and new design rub strips.

This is all icing on the cake for a car that has been rated as the best sedan car in the world - that title now seems to be securely in the hands of the new S-class - and should see the E- class through to its replacement further down the track.

And it presses the argument that diesel engines do make sense even in Australia where fuel prices are virtually equivalent to petrol. The performance is stunning - helped by the 400Nm of torque - as is the economy. Mercedes quotes an overall consumption of 7.1 litres per 100km, a figure that belongs in the small car class and makes an interesting comparison with the 11.2 litres/100km quoted for the petrol-engined E240.

Driving the new E-class is like a re acquaintance with an old friend. All the familiar things are there - peerless ride and handling, efficient, almost sparse interior architecture, big, firm seats, heaps of passenger space - yet the Mercedes has also matured.

If the exterior changes are all-but undetectable, the interior at least offers a few clues indicating this is the latest E-class.

The new steering wheel with controls for audio, trip computer and telephone (if fitted) is aimed at keeping the driver's attention on the road and is complemented by a digital display built into the instrument panel.

Those familiar with E-class interiors will also appreciate the upgraded materials designed for durability and longer life - for example the roof lining and boot carpeting are significantly heavier - as well as items like the electrically operated front seats (height and backrest angle only) and extra courtesy lights in the doors.

The range is three-tiered as before - Classic, Elegance and Avantgarde - although not every engine option is available with every level of trim. The E270 CDI for example comes only in Classic and Elegance form.

And that brings us to the new Mercedes diesel.

It is based on the cast-iron crankcase of the 3.0-litre diesel but is better reinforced and has thicker cylinder walls. It uses and aluminium head with four valves per cylinder and the now widely used high-pressure, common rail injector design.

First impressions are important and the 2.7-litre oil-burner scores well from the beginning.

On startup, it's necessary to listen closely to detect any diesel clatter. It's there, but so muted passengers cease to notice it after a while.

The 2.7-litre engine responds in an impressive fashion. There is a surge of power totally unexpected in a diesel - turbo or not - and it doesn't run out of breath quickly either.

The 125kW may be the same as the 2.4-litre petrol V6, but the massive 400 Newton metres of torque (the same, but at lower rpm, as the 4.3-litre Mercedes V8) gives the turbo diesel a feeling of invincibility. In fact the Mercedes is capable of shaming many a V8 and actually puts the traction control system to the test on occasions.

The new control system for the five-speed automatic offers its manual override facility through moving the lever laterally - left to downshift, right to upshift. Like most such systems it won't allow the driver to be stupid - high-speed downshifts, if attempted, don't happen - and usually best left alone until the car is being driven in conditions that normally confuse auto gearboxes.

On a winding, hilly road, the manual override becomes a boon as it provides a way of avoiding the usual endless "hunting" up and down the ratios by the automatic.

One of the few downsides is the typically heavy, reluctant Mercedes accelerator pedal - much improved, but still difficult to use when it comes to feeding in just the right amount of power.

All E-class models now also use the Mercedes stability control system that steps in to help stabilise the car if the driver begins to lose control in a corner. This system was also used as part of the measures to address the stability problems encountered by the small A-class Mercedes early in its life.

Of course the Benz steers so well that this sort of thing will only happen with severe provocation.

The E-class is not a sporting car but it's not ponderous to handle either, feeling poised and sure-footed rather than just heavily planted on the road. It is wonderfully quiet, and rides with a serenity offered by few cars.

In the end, the E270 CDI is a thoroughly impressive addition to the Mercedes fleet, a real temptation for those interested in conserving resources and an assured interstate cruiser that will go further on a tank of fuel than any big car has a right to.