There's lots of exciting things going on in the premium compact camera market at the moment, with Photokina 2012 probably about to reveal even more.

Panasonic is just one of the myriad of manufacturers who are keen to move away from entry-level compact cameras in a bid to appeal to those who want something that gives a little bit extra.

The Panasonic LX3 was an incredibly popular camera, so Panasonic has a good legacy with the LX series. Although the Panasonic LX5 didn't quite live up to its predecessor, we think Panasonic could have done enough here to see greater success with the Panasonic LX7.

Panasonic clearly sees the Sony RX100 as the main rival to the LX7, despite the fact that it uses a smaller sensor. Happily, it's quite a match for Sony's offering, despite the smaller sensor size.

Image quality is great, while our labs test indicate that the Panasonic LX7 shows an improvement in quality in the raw files, with less noise and greater dynamic range. However, when it comes to the JPEG images, dynamic range results between the LX5 and LX7 are close, with the LX5 just having the edge. Signal to noise ratio results at the lower end of the sensitivity scale show the LX7 has better noise performance, at the top end of the sensitivity scale, however, the LX5 performs better.

With a good range of digital filters and fun features to tempt a wide range of photographers, the Panasonic LX7 is a real photographer's compact camera, as well as being accessible by enthusiasts and beginners.

We liked

There's lots to like about the Panasonic LX7, but improvements in handling, such as the addition of an aperture ring, and the fantastic choice in digital filters, are two stand-out features.

We disliked

We'd really love to see a touchscreen make an appearance on an advanced compact camera such as this. It makes the process of selecting an autofocus point, among other things, so much easier, and would have elevated this camera to an even higher score.

Final verdict

With lots of fantastic features and brilliant image quality, Panasonic has produced a compact camera to be proud of with the LX7. With a wide maximum aperture of f/1.4, the ability to shoot in raw format and full manual controls, many people will surely be tempted by this. It's main competitor, the Sony RX100, currently retails for around £100 more, so you're getting a bit of a bargain to boot.