Hot on the heels of the LUMIX GF2 launching just over six months ago, Panasonic has introduced its smallest and lightest interchangable lens camera system yet - the LUMIX GF3.

The company has also added the Leica-branded DG Summilux f1.4 fixed lens to its wide range of Micro Four Thirds lenses. The new lens incoporates new "nano surface coating” which is designed to reduce ghosting and flare.

The manufacturer has slimmed down the aluminium chassis of the LUMIX GF3 considerably since the GF2, with the new model being 17% smaller and 15% lighter. Along with its slimmed down profile, Panasonic's new Micro Four Thirds camera packs the same 12.1 megapixel Live MOS sensor as its predecessor along with the Venus Engine VII. The camera packs an ISo range of 160-6400 along with the same fast 0.18-seond AF speed as the GF2.

Along with high quality snaps, the camera can also capture high-def AVCHD video at 1080i/25fps, complete with Dolby sound. There's no viewfinder, but you will find a 3-inch touchscreen display and there's also a pop-up flash built-in to the top of the unit (although no hotshoe).

The LUMIX GF3 is equipped with a new control dial that has been introduced to complement the touchscreen control, while a 'minature' mode has been added to the range of special effects that you can apply to your images, making it possible to take tilt-shift pictures.

Available in four colours (black, red, white and brown), the LUMIX GF3 also includes Panasonic's Intelligent Auto Plus mode (iA+) which automatically picks the most suitable settings for you when taking a shot. This is great for beginners as well as those those who need to line a shot up quickly.

The fact that the camera looks more like a compact than any of its predecessors is a key selling point, as it will certainly appeal to those who are trading up from a compact for the first time and who don't relish the thought of carrying a big, bulky camera around.

- Check out our First Look review of the Panasonic Lumix DMC-GF3