It's finally happened: Panasonic has created a compact camera with a large Micro Four Thirds sensor on board. It's called the Panasonic Lumix LX100 and we here at Pocket-lint had hands-on time with the forthcoming camera ahead of its official Photokina announcement. Is it a high-end compact to get more excited about than all the competition?

Because, let's face it, the competition has rapidly advanced in the high-end compact camera sector in recent years. Fujifilm and Sony have considerable products ranging from the Fujifilm X20 and Sony Cyber-shot RX100 III, through to the pricier Fujifilm X100S. Panasonic has largely been leaning on its ageing Lumix LX7 for a few years now and, as much as we think the LX7 is a great little camera for a number of reasons, it's the larger sensor that now seems to be the biggest lure in the compact camera world.

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On first sight the Lumix LX100 gives us the impression Panasonic pushing into Fujifilm territory, with the LX100's design - and even its name - having a hint of Fujifilm X100-meets-X20 about it. Much like the X100, the Panasonic LX100 has a full aperture control ring around the lens and a dedicated shutter speed control dial on top of the camera. That means you can dip in and out of manual or priority modes depending on the combination of where dials are positioned.

We didn't feel that the Lumix LX100's build quality, here in its black finish (silver will also be available), has quite the same degree of quality as the aforementioned Fujifilm, however, as the tactile quality of the dials and plasticky lens ring doesn't quite achieve that top-tier high-end feel.

But there's still a lot to like about this camera. Foremost to its design is a 24-75mm f/1.7-2.8 (equivalent) Leica lens (pretty sure we'll be seeing a version of that for interchangeable Micro Four Thirds cameras then) complete with that aperture dial which can be stopped down in thirds. It's quick to adjust the aperture setting, although as there's no physical zoom control we found the toggle-based function around the shutter button to be rather slow to travel through the zoom range.

The lens construction - five aspherical lenses including two ED lens elements, complete with nine blade aperture for rounded bokeh - is unconventional compared to normal Micro Four Thirds lenses, as it had to be designed to accommodate the smaller desired front lens element and scale of the LX100.

While that's an engineering feat in itself (achieved with a negative power element and arrangement of not-fully-disclosed additional elements), we wouldn't call the LX100 a particularly small camera. Its 114.8 x 66.2 x 61.1mm dimensions see it far larger than the 1-inch sensor Sony RX100 III, for example, and only a touch smaller than the chunky Canon PowerShot G1 X MkII. Once switched on the lens also protrudes further from the camera body.

Secondly there's the multi-aspect ratio Micro Four Thirds sensor - a concept that Panasonic last put to market with the Lumix GH2. In the case of the LX100 it adopts the Lumix GX7's 16-megapixel sensor, adapted for 3:2, 16:9, 1:1 and 4:3 ratios (selected via a switch on the lens barrel). None of these will achieve the full 16-megapixel resolution, of course, given how the full sensor is not used for the different ratios, with the 4:3 providing a 12.8-megapixel output. The purpose of such cropping means the camera will always be using the sweet spot of the image circle for the best results.

As far as image quality goes, that's one area that we're just going to have to wait and see. We've only taken a handful of snaps in a dim-lit office environment where our meeting was held. But if the GX7 is anything to go by as a benchmark then, and given the lens pairing, the LX100 ought to be one to watch when it comes to overall image quality. However, ISO sensitivity begins at ISO 200, with an extended ISO 100-25,600 range available.

Other key features include the 2,764-dot resolution LCD electronic viewfinder. It features to the upper left of the rear and thanks to a 0.7x equivalent magnification it's really large to the eye. Not quite as big as the Fujifilm X-T1, but on its way there. The quality of the preview image looks decent too.

However, the 3-inch rear screen lacks touch sensitivity and is in a fixed position, so no snazzy press-to-focus or vari-angle features to be found here. That seems like something of an oddity to us, particularly as the also-announced Lumix GM5 comes with a touchscreen in a smaller build.

READ: Hands-on: Panasonic Lumix GM5 review

From the limited use we've had the LX100 responds super-fast, no surprise given it touts the same engine as the top-spec Lumix GH4. That also means 4K video capture is possible at 30 frames per second, or 1080p at up to 60fps if preferred. There's also up to 11fps available when capturing stills.

A Micro Four Thirds sensor had to appear in a compact camera form, and from what we've seen the Lumix LX100 looks like a solid first attempt. However, it doesn't exude quite the same build quality finesse as its Fujifilm competition, while the large physical scale may not make as much of a dent in the Sony RX100 III's success as Panasonic would like.

But with a £799 price point Panasonic has positioned the Lumix LX100 fairly aggressively. That's hundreds of pounds less than the Fujifilm X100S but with the additional benefit of a zoom lens, and while it's the same asking price as the Canon PowerShot G1 X MkII the built-in viewfinder makes the Panasonic a more rounded product.

Let the high-end camera wars commence. We look forward to using the Panasonic Lumix LX100 one in greater depth in the near future, when we'll bring you our full review ahead of the 16 October UK release date.