The microcar BMW has developed with Britain's Bath University is likely to carry the Isetta badge, a 21st century salute to the famous microcar introduced in Europe in the 1950s.

The luxury German carmaker has been working for some time with the university on a new range of eco-friendly two-, three- and four-wheeled city runabouts.

Analysts in Europe say the return of the Isetta badge provides the main inspiration for the four-wheeled microcar.

The tiny BMW would be rear-engined and rear-wheel drive, with futuristic styling, despite its retro Isetta badge.

Inside, it is expected to be packaged in a similar way to the Toyota iQ, with seating for three adults.

A range of small-capacity petrol and diesel engines have been developed to deliver fuel economy of around 2.8litres/100km (100mpg) and emit less than 90gr/km of CO2 exhaust emissions.

Other power systems are also under consideration, including an all-electric version using technology from the new electric Mini.

A BMW insider was quoted in Europe as saying: "We are committed to producing a super-economical or zero-emissions vehicle or range of vehicles. However, it's going to be at least five years before production models hit the road."

But analysts say that as demand for eco-vehicles gathers pace, the Isetta could appear in showrooms in Europe inside two years, with an electric version following in 2012.

The original Isetta was one of the most successful microcars produced in the post-war years, when cheap, short-distance transportation was most needed.

The design originated in Italy, but the car itself was built in a number of countries, including Germany, Spain, Belgium, France, Brazil, and Britain.

It quickly became known as the bubble-car, because of its egg shape and bubble-like windows.

There were other nicknames: in Germany it was called "das rollende Ei" (rolling egg"), or "Knutschkugel" (snogging ball). In France it was the "yoghurt pot." In Brazil it was the "bola de futebol de fenem " (soccer ball of FNM, a truck maker). In Chile it is still called the "huevito" (little egg).