"Two major surprises are unfolding simultaneously. The first is that I'm currently piloting a 501bhp Volvo S60 round a circuit, where it is consistently - and perhaps surprisingly - failing to be rubbish. The second is that the track in question is a full FIA-spec, Swedish Touring Car venue slap-bang in the middle of downtown Gothenburg. No, me neither.

OK, it's not a Spa or Monaco, and Usain Bolt wouldn't take very long lapping it. But there's a rippling ribbon of fast corners and a decent back straight, with a bustling harbour on one side and a skyline stuffed with Scandinavian modernism on the other. The Volvo positively thunders round it, all turbo chumpf and expensive-sounding baritone exhaust woofle. It brakes and turns in with the bite and vigour of, well, a touring car. Definitely not rubbish, then.

For which you can thank Polestar. Volvo's official racing wing since 1996, it's also an Alpina-style ‘performance partner' with designs on full-blown M-ness, while the boss apparently fancies himself as a Scando Ron Dennis. TG had a brief go in Polestar's 400bhp C30 concept back in August 2010 - "one of the most entertaining cars we've driven in years," Sam Philip reported.

You can sense the integrity the moment you get behind the wheel of this stunning-looking S60 prototype. Somehow it manages to be a masterpiece of restraint, while detonating Volvo's risk-averse reputation at the same time. Hot Volvos - from rally-bred 240s in the Seventies to the custard-yellow tyre-shredding Nineties T5 R - have always punched above their visual weight, but this is the punchiest yet. The Polestar S60 is 20mm wider at the front, 40mm at the rear, and this extra width transforms the standard car's anaemic skinny-hipped look. Only the roof, front doors and bonnet survive unscathed; the new front wings are carbon fibre, and thorough wind-tunnel work has bequeathed the car a sleek new front splitter and rear diffuser. It sits 30mm lower than the regular car, the Polestar-designed 19in front alloys hide 380mm steel brake discs with six-piston calipers, and the rubber is the same flavour Michelin Pilot Sport favoured by Sweden's other performance name, Koenigsegg. The distinctive pale blue paint job is a Polestar signature, but only the subtlest of logos nestling in the grille gives any clue to the car's identity or potential.

Under the bonnet lies the familiar 3.0-litre in-line six-cylinder engine, whose healthy 304bhp in standard form is trampled underfoot by Polestar's men in black. Pretty much everything is new, much of it handmade for this one-off car. A Garrett turbo running 1.5bar of boost replaces the one in the T6, aided by a new, bigger and wider intercooler. There's a new intake plenum, milled from aluminium, and upgraded con rods. The cylinders are bored and ported, and there's a new camshaft. "Other than that, it's stock..." says Polestar's chief engineer with a smile.

There's an aluminium sub-frame, stiffer anti-roll bars front and rear, a stainless steel exhaust, modified control arms, and race-spec three-way adjustable Öhlins dampers. The battery now sits in the back to optimise weight distribution, and with 424lb ft of torque to manage, the T6's auto 'box has been replaced with Volvo's M66 manual, usually mated to the firm's diesels. This saves another 40kg (at 1,640kg overall, the car is about 80kg lighter than the regular T6). Perhaps most significantly, this prototype is running the latest-gen Haldex all-wheel-drive transmission, allied to an electro-mechanical limited-slip diff.

This promises not just grip but also some slip. Current Volvo Polestar race driver Robert Dahlgren - who cut his teeth racing Jenson Button in F3 - takes me for a few demo runs first, and it's obvious that this is a Volvo like none before. "At the moment, we're pushing from behind," he says, as the car headbutts the horizon again, "and we need to get way ahead, push the limit a bit. And then we can come back."

I know what he means, and, when I have a go, it feels like they're about 80 per cent there in the M3/C63/RS4-rivalling stakes. There's an amphetamine rush of turbo boost from 2,500rpm to the 7,100rpm limiter, but it's linear, and it's a pleasure working through the gears manually, like we used to do before PlayStations, flappy paddles and the Internet. It's all very meaty and man-sized, but everything is well balanced and blended, and things happen - very rapidly - in the right order. Shut the throttle off abruptly, and it gets a bit rude, but, despite the huge reservoir of power, you're always in charge, the body control is exemplary, and the steering - a tunable electro-hydraulic set-up - is terrific. Not sure how good it would be on a beaten-up British B-road, and there is some torque steer to contend with, but, still, no Volvo I've ever driven has a front end anything like as communicative as this.

The cabin is understated and cool, adding extra mood to Volvo's traditionally clever ergonomics. Plus the distance warning system in the head-up display has been ditched in favour of a yellow-green-red gearshift strip light.

As Volvo gamely prepares for its four-cylinder-only future, this S60 will be a very (10 only) limited edition halo car for the Swedes. It cost a fortune to build the concept - £250k, apparently - and was more or less bankrolled by the crazed individual who demanded a hot S60 after seeing Polestar's C30. Raise a glass of something strong and Scandinavian to this mysterious man, to Volvo and, most of all, to Polestar.


The numbers
2953cc, 6cyl, 4WD, 501bhp, 424lb ft, n/a mpg, n/a g/km CO2, 0-62 in 3.9secs, 186mph, 1640kg

The cost
Around £250k (to build)

The verdict
A convincing performance overhaul. Polestar have done a Jekyll & Hyde number on the S60 without any murderous side effects.