Debuted early in an advert by mistake, Panasonic has now officially launched the Lumix GF1, its third Micro Four Thirds camera at IFA in Berlin on Wednesday.

The new LUMIX DMC-GF1 debuts as the world’s smallest and lightest system camera with built-in flash, swiping the claim from the Olympus E-P1 and adding a flash into the mix as well.

Coming in three body colours: true black, active red, and sleek silver, the thin neo-classic body design (read retro) significantly reduces the size of the company's first micro four thirds offering, the G1, by 35% and its weight by 26%.

Key features include built in flash, 3-inch LCD screen and Live View functionality (it ditches the optical viewfinder).

Sporting a 4/3-type 12.1-megapixel Live MOS sensor Panasonic will also be battling head on with Olympus with the introduction of a number of "Art Effects". You'll get My Colour mode with a total of seven preset effects – Expressive, Retro, Pure, Elegant, Monochrome, Dynamic Art, and Silhouette, while Custom mode lets users manually set the colour, brightness and saturation levels.

Video comes in the guise of Full HD - 1280 x 720 - in AVCHD Lite. Movie recording formats also include HD Motion, JPEG, QVGA, VGA and WVGA with iA (Intelligent Auto) also available for motion image recording.

Elsewhere there is Panasonic's usual array of technological goodies including Optical Image Stabilizer (O.I.S.), Face Detection, Intelligent Exposure and Intelligent Scene Selector.

The new Lumix GF1 will be the third camera in the Micro Four Thirds range and looks to be a direct response to Olympus E-P1 released earlier in the year.

Pricing puts the LUMIX DMC-GF1 at around $899.95 when it launches in October.

There will be two kit sets available; One kit option includes the newly-announced LUMIX G 20mm/F1.7 ASPH, a compact and lightweight "pancake" lens, while the other kit features the LUMIX G VARIO 14-45mm/F3.5-5.6 ASPH/MEGA O.I.S.

The optional Live View Finder DMW-LVF1 has an SRP of $199.95, while the DMW-MA2M and DMW-MA3R both have an SRP of $249.95. All new accessories will also be available in early October.