Mercedes-Benz is working on a new kind of four-cylinder engine that combines features of petrol and diesel motors to generate 238 horsepower while using less than six litres of standard petrol per 100 km.

The premium brand of DaimlerChrysler plans to roll out the new 'DiesOtto' engine "in the medium term", the world's fifth-biggest carmaker said last week, eager to polish its green credentials as pressure builds to reduce the emissions that contribute to global warming.

Using less than six litres of fuel per 100 km is the equivalent of getting nearly 40 miles per gallon.

"This figure by no means relates to a small or compact car, but to a vehicle the size of the current [Mercedes-Benz] S-Class, with the level of comfort and safety that is typical of a Mercedes," a company statement said.

The move reflects efforts by carmakers to make petrol and diesel engines more efficient and less polluting to ensure they remain in broad use even as alternative drivetrains such as hydrogen fuel cells arrive.

DiesOtto - the name combines the German words for diesel and petrol engines - envisions an engine with a displacement of only 1.8 litres, turbo-charged for high performance and using petrol direct injection to boost efficiency. The idea is to use a spark plug to ignite the fuel/air mixture when starting the engine or at high speed. At low and medium speeds, however, the combustion process works more like that of a diesel engine, which does not use spark plugs, it said.

Volkswagen is working on something similar and has said it plans to roll it out by the middle of the next decade. It already offers a technology with its 1.4 litre TSI petrol engine that unites a mechanically driven supercharger and a turbocharger.

The engine, which is currently offered with the Golf GT Sport compact, has 168 horsepower.