It’s easily the most expensive Civic yet, costs a wallet-withering £38,599 and in one sense is an absolute bargain.

Why? Because each of these tuned 240bhp Type Rs costs about £190,000 to build, netting creator Mugen a £150,000 loss for every example sold. Which makes it easier to understand why there will only be 20.

There is method to this fiscal madness, however, the establishment of Honda engine tuner Mugen in the minds of UK petrolheads being the aim. We Brits buy more Type R Civics than any other country, including Japan, presenting this tuning specialist with a tempting commercial opportunity. Mugen means “unlimited” – supposedly of power, rather than price – and though it’s owned by the Honda family, with a history stretching back to 1973, it operates separately from Honda.

Unusually, the process of making these 20 special Civics occurs entirely in the UK, Honda shipping British-built Type Rs from its Swindon plant to Mugen’s premises in Northampton. The priciest element is the total strip-down and high-precision rebuild of the engine into what’s virtually a full-race, hand-built £19,000 motor.

A new air intake, redesigned pistons and camshafts, the deletion of the balancer shaft, a revised electronic control module and a fiendishly complicated, twin-tailpipe exhaust in stainless steel are part of the package, though it’s mostly labour that runs up the bill.

The result is a 39bhp power boost to 240bhp, a 10 per cent torque uplift and a rev limit stretched to a yelling 8,600rpm. A limited-slip differential, 32 per cent lighter alloy wheels, UK-tuned suspension, upgraded brakes and a bodykit are also provided.

Despite that high price there are options, too, including stickier Yokohama rubber and the replacement of the rear seat by a composite bulkhead, cutting another 86kg over the 20kg already pared from the standard car.

Horsepower watchers may instantly conclude that 240bhp for £38,599 compares poorly with the 300bhp, £26,995 Ford Focus RS, but Honda claims that the Civic will circumnavigate the Nürburgring 2.7 seconds per lap quicker.

We enjoyed a flashing sample of this prowess at a tight little test circuit in Japan, which the Mugen tore around with electrifying verve. It feels intoxicatingly close to a full-on, no-holds-barred racer, the thrill heightened by the super-sharp responses of throttle, wheel and brakes.

Yet this is an easy car to drive, and one that deploys its substantial power with tidy aplomb. The Mugen engine delivers its greatest work close to that lofty red line, and with a staccato crescendo that has us yearning to stretch it in every gear around a test track that was almost as smooth as the Honda’s Championship White paint.

Just one sudden crest severely tested its mid-bend stability – but it was not found wanting. The Civic resists tyre-trashing understeer through all but the tightest turns, and has heart-calmingly effective brakes, too.

What we don’t know is how it will cope with Britain’s B-road bumps. Its behaviour over those will determine whether this ultra-pricey hatch is worth considering despite that eye-widening price.

For some Type R fans, the prospect of owning so rare a car – and the curious bargain that it represents – will prove irresistible. And after that, expect more tuned cars and components from Mugen – including hot hybrids.

By Richard Bremner

My first sight of the rarest and probably most desirable Honda Civic on the planet is a flash of blood-red paint and a glint of black wheel spokes a couple of hundred yards away. Even at this range I know it’s the real thing, and up close the Mugen RR is even more striking.

Its owner, Waqar Ahmed, hops out and we shake hands. The driver of the car that followed the Mugen into the lay-by has joined us on the pavement and I shake his hand too. I assume he’s a friend of Waqar’s. Waqar thinks he’s a friend of mine. Turns out he’s a stranger to both of us; he’s simply a Honda enthusiast who wants to know if the car is for sale!

‘It’s mental,’ says Waqar, who collected the car from import specialists Performance Centre Manchester just a few days ago. ‘Everywhere you stop you end up surrounded by people.’ That’s testimony to three things: the irresistible, ground-skimming stance of this limited edition Civic, the desirability of cars that marry the Honda and Mugen names, and the power of the internet.The Civic Mugen RR (be cool and say ‘double R’ rather than sounding like a pirate) went on sale in Japan last September and all 300 examples were snapped up in just ten minutes. This is the only example in the UK and is likely to remain so, as back home RRs are now changing hands at a premium, which is quite something, because while the standard Japanese-market Civic Type-R costs 2.8m yen, this Mugen was 4.8m yen.

That’s quite a hike – about £8K – for what appears, as first glance, to be a gentle massaging of the already impressive JDM Civic Type-R. The more you delve, however, the more thorough you discover the rework has been and the more plausible Mugen’s claim to have built the ultimate front-drive car becomes.

Mugen is well known for offering tuning and styling parts for Hondas, but everything on the RR is unique and will not be on sale separately. Take a chunk out of one of the 18in, seven-spoke forged alloy wheels and you’ll have to prove you own an RR to get another. Ditto the restyled front and rear bumper aprons, which are fashioned from carbonfibre, the vented bonnet in aluminium and the new rear spoiler, also carbon, with additional Gurney flap.