Panasonic and Olympus have announced a new camera format that promises to offer you all the capabilities of a DSLR, but without the size. Can it deliver? We spent the day with the Panasonic DMC-G1 at Wembley Stadium to find out.

The Panasonic G1, not to be confused with the Android-powered G1 from T-Mobile and Google, uses a new 12-megapixel sensor developed and built in collaboration with Olympus. Called Micro Four Thirds, the technology basically allows Panasonic to lose the mirror in a standard DSLR making for a considerably smaller device but with the promise of delivering the same qualities and controls as a standard DSLR.

Based on that assumption it has allowed Panasonic to create a pseudo-DSLR that is around 52% smaller than the company's current DSLR offering, the L10. Impressive.

Talking to customer focus groups Panasonic has created the G1 as a "mini me" styled DSLR camera that fits in the palm of your hand.

Right, now we've got the premise behind the technology behind us, what about the camera itself?

Available in three colours - red, blue and traditional black (apparently an attempt to appeal to the female market) - the camera is as tiny as you might expect: it's like a camera that is still growing into something bigger.

The back sports a 3-inch flip-out LCD display that allows you to see what's going on very clearly. All the relevant details can be accessed from here and luckily the display configurations can be changed to turn some of it off. This might be a camera aimed the entry-level market, but with everything turned on there are so many icons, at times it is a little overwhelming.

Because of the lack of mirrors in the camera there isn't an optical viewfinder. Instead Panasonic have had to go for an electronic variant, which from previous experience is not always a good thing. Realising this could be the Achilles heel in the device, Panasonic has opted for a high resolution EVF (1.4million pixels). A nice touch is that there is a sensor on the back so it automatically knows when you have your face to the viewfinder, so it turns off the LCD screen.

With such a small body, the camera does at times feel like it's a little over-crowded, however Panasonic has done well to cram in everything, including a HDMI socket so you can connect it straight to your HD television. The main shooting controls are found on the top of the camera on a dial with a secondary switch used for selecting the shooting modes.

Trying to keep it simple Panasonic has opted for what it calls an intelligent auto mode - common on compact cameras - which automatically changes the settings of the camera to best suit the photo you are trying to take. Here you get anti-shake, anti-motion, scene detection, face detection, subject detection and light detection. In our day of shooting and second try at the camera (we also had a play in September at Photokina) the camera responded well to our requests.

So what are the pictures like? On the whole very good. Unfortunately we can't share any shots we took at outside in the stadium at Wembley due to licensing rights (crazy we know), however what we saw, considering the technological leap in design over performance was very good. The shots inside, with poor light and no flash on the auto mode still look good and it would be interesting to see how the camera performs outside in good conditions.

The camera comes in two guises; either with one kit lens or two. Those opting for the cheaper £600 option will get a 14-45mm equivalent lens while the second lens available is a 45-200 giving you a wide range. Panasonic say that it plans to launch three more lenses next year, although with the addition of a Four Thirds lens mount you can use any Four Thirds lens.

Price when reviewed:

First Impressions

The G1 could represent a massive step forward for how we take pictures, and while Panasonic has opted to go the route of making it look like a miniature DLSR camera (what the focus groups want) this looks like a good start to a new category of cameras.

What's interesting here is that Panasonic, clearly aiming it at those who want the functionality of a DSLR without the size or confusion, are setting the price at a realistic level as well.

We might have played with a pre-production sample, but the results we got mean this is one to look out for.