all-German starting grid, The Royal Gazette can reveal.

Luxury carmakers BMW and Mercedes are set to be neck-and-neck as favourites to replace the existing 14-year-old car.

But BMW -- which provided the existing seven series model -- is odds on to take pole position.

It is understood, however, that French car giants Peugeot and the UK's Jaguar and Rover have also been looked at as contenders -- although they are likely to be an outside bet.

And the chequered flag is to fall on the winner of the contest around the end of the year.

The Royal Gazette understands that a shortlist of two to three marques had been drawn up.

Works and Engineering Minister Alex Scott said: "We have looked at BMW -- we have not restricted ourselves to BMW.'' And Government is also considering a fleet of Cabinet cars from the same manufacturer to take advantage of economies of scale and bulk buying deals -- although Ministers would drive smaller models than the Premier.

Mr. Scott said: "We've written and spoken to dealers on-Island and off-Island and we've gotten it down to a shortlist.

"And it looks as if we will be able to come up with a very good figure on cost for GP1 and on how we can cascade down over time with other Ministers cars and replace them.'' Government is thought to be keen to buy a car which can be imported and serviced through a local dealer -- which would favour both BMW and Mercedes, as well as Peugeot or Rover.

Both luxury Jaguar and Rover, however, could be ruled out on cost grounds as cars are far more expensive in the UK than they are in the rest of Europe.

Mr. Scott said the official transport for the Premier had to be "appropriate'' for the leader of the Country.

He added: "In that regard, we have looked overseas and at various cars.

"We have undertaken a study, not only of GP1, but how we can more efficiently and effectively manage more of the Cabinet cars and all of the civil service fleet.

"We will start seeing more visibly the management of these cars in the future.'' Mr. Scott noted that Government was mindful of buying local.

"The BMW was a line above what is bought by the member of the public, but it was consistent with the dealerships,'' he said.

He added that the former Government started the process to replace the current GP1 -- which probably now costs more a year to service than its resale value.

Mr. Scott said: "The Premier has been very good and patient to the point that she has, on some formal occasions, had to use other vehicles.'' Premier Jennifer Smith has been seen recently in the grey Mitsubishi used by Police Commissioner Jean-Jacques Lemay, who has been on honeymoon.

Mr. Scott said: "The Police have been very helpful on occasion as GP1 wasn't satisfactory.'' He added: "The Premier did want us not to be ostentatious in our choices and to be frugal.