Joining the ranks of Panasonic’s already successful G series is the Lumix GF2, giving you a 19 per cent reduction in size over the GF1 launched last year, without losing any functionality - except perhaps the loss of the jack for a cable release.

Whilst slimming down the 12-megapixel hybrid model, Panasonic has also packed in its Venus Engine FHD, which boasts three CPUs giving you more processing power to crunch though the advanced features the GF2 offers, like compatibility with its 3D lens, Full HD (AVCHD) video with Dolby Stereo capture and burst RAW shooting.

But the biggest change that you’ll notice from a usability point of view is the removal of the control dial on the top and the inclusion of a touchscreen display. But this isn’t just a case of whipping off the knob and making you deal with a fiddly menu system.

Instead, Panasonic has introduced a range of features that play to touch support, such as touch focusing, touch shutter release and being able to customise the Quick Menu by dragging and dropping icons. Buttons remain however, so you always have instant access to Panasonic’s excellent iA (intelligent auto) shooting and instant video capture.

We got some hands-on time with the new camera, and a walk through the new features with John Mitchell, product manager at Panasonic. “Quality and innovation” Mitchell stressed, were at the core of the GF2. That’s not just marketing speak, as the touch interface seems a whole lot more usable than Sony’s NEX approach.

Of course, the GF2 is compatible with Panasonic's current range of 11 MFT lenses, with four more lenses on the roadmap for 2011. It is pictured here with the 14mm pancake lens.

We’re penning our thoughts on the new Micro Four Thirds hybrid for a First Look review, and whilst we do so, feel free to peruse our glittering gallery of shots. 

The Panasonic Lumix DMC-GF2 is expected to hit stores in January 2011, and the guide price we were given today was £629.