Interchangable lens compact system cameras may offer a more portable option than a DSLR, but unless you're using a relatively flat pancake lens, they're still considerably bulkier than a digital compact camera. That's why there's now a comprehensive selection of high-end compacts for you to choose from, such as the Canon G1 X, the Sony RX100 and the Fujifilm X10.

Replacing the Panasonic LX5, the Panasonic DMC-LX7 is the brand's latest premium compact and builds on the work started by the Panasonic LX3, which was released four years ago.

Announced alongside the Panasonic Lumix G5, the LX7 sports a DC Vario-Summilux F1.4 lens Leica lens. In fact, Panasonic's LX range is essentially the same as the Leica D-Lux series, but with much lower prices.

While cameras such as the Sony RX100 have gone for larger sensor, the 10.1MP Panasonic LX7 actually sports a very slightly smaller sensor compared to its predecessor - at 1/1.7-inchs.

If the sensor isn't larger, then what does the LX7 bring to the table? Well, firstly, there's a new manual aperture ring, not to mention a better screen a faster f/1.4-f/2.3 zoom lens, an expanded ISO range and the ability to shoot full HD video.

The camera body itself isn't too different from previous models, with the aluminium casing giving the camera a decidedly premium feel and well as feeling nicely weighted for a comfy grip.

Panasonic Lumix LX7: Controls

The controls on the top of the the LX7 are pretty much idential to those of the LX5, with the same sturdy dial along with the power switch, dedicated movie record button, shutter release and zoom control. You'll also find dual microphones sitting just in front the hotshoe.

Likewise, controls on the back panel are the same as before, with the familiar selection of menu and playback buttons. The only addition is a contol that enables you to switch between the manual focus and the built-in ND (natural density) filter. You can also use it to toggle through the onscreen menus and the photos in playback mode.

As well as being home to the usual AF and aspect settings, the front of the camera also includes a brand new aperture ring.This can be adjusted from f/1.4 all the way down to f/8.0 and gives the camera a nice, retro feel while giving you manual aperture conrol, without the need to navigate through the camera's menu system, making operation a whole lot quicker.

Panasonic Lumix LX7: Screen

The 3-inch LCD screen sports a 920k-dot resolution, so while it doesn't have the sharpest screen around, it's still perfectly respectable for a camera in this price range and the resolution is twice as good compared to the previous model. It struggled a little in very bright sunshine, but that's hardly unsual for an LCD panel.

Unlike some of Panasonic's other cameras such as the G5, this isn't a touchscreen, but at least that means the display won't be covered in fingerprints the second you start using it.

If you were hoping to find a viewfinder, you're out of luck. However the LX7 does include a hotshoe connector alongside an accessory port so that you can attach an EVF if you choose.

Panasonic Lumix LX7: Picture quality

While the LX7's sensor may be slightly smaller than those on some of its main rivals, it's still a perfectly respectable sensor that's far better than those you'd find in cheaper compacts.

The smaller sensor also means that the camera can accomodate a pleasingly bright lens while keeping the camera chassis nice and small (and keeping the price down).

As on previous models, the LX7's AF is excellent and it copes well in low light, while the f/1.4-f/2.3 zoom lens is very speedy indeed.

While the picture quality may not have actually improved since the LX5, the standard was pretty high to start with so we can't grumble too much. Pictures are packed with detail with a level of clarity that you simply won't get from most compacts.

The only time it really struggles is on the higher ISO settings (there's a range of ISO 80-6400) - not exactly unusual for a compact, but some of its slightly pricier rivals, like the Sony RX100 cope much better.

While pretty evenly matched with Sony's high-end compact in many respects, the LX7 has the edge when it comes to arty farty filters.

The range of options has grown to 16 since the previous model and includes filters such as selective colour and many of these modes are customisable, giving you even more scope to make your top-quality snaps look like they were taken on a camera from the 1970s. What’s more, these can also be used in raw mode and can even be removed afterwards if need be.

Panasonic Lumix LX7: Video

The LX7 has had a definitive video upgrade since its predecessor so that you can now record full 1080p HD AVCHD footage at 50 fps. Alternatively you can opt for recording in MP4 format at 25fps.

The placement of the mics on the centre of the top panel is also good news for steadier audio when recording.

Panasonic Lumix LX7: Battery

We've been using Panasonic's LX3 for a few years and now and have always found the battery performance to be extremely reliable. Likewise, Panasonic quotes 330 shots on a full charge from the LX7. While this is less than the 400 that the LX5 offers, we found that it was actually more in practice. The LX7 will easily give you a whole day of shooting, and then some.

Panasonic Lumix LX7: Verdict

The Panasonic LX7 is a great piece of kit in a very compact body. The addition of the manual aperture ring since the previous model gives it an added edge over many rivals, as does the Leica lens and zippy auto focus.

While cameras such as the RX100 may have a slight edge in terms of sensor size and performance in low light, the LX7 makes up for this thanks to its price, ease of use and stunning image quality that's still far superior to most compacts on the market. Not only is it an excellent back-up snapper for pros, it also makes it easy for amateurs to get fantastic shots.

Panasonic Lumix LX7 availability: September 2012

Panasonic Lumix LX7 price: £449

Announced alongside the brand's Lumix G5 compact system camera, the Panasonic DMC-LX7 is the company's latest flagship digital compact camera.

The new snappers is set to go head to head with the likes of the Fujifilm X10 and X100 and the newly announced Sony RX100.

Following on from the popular Lumix LX5 (and the LX3 before it), the new LX7 sports the same good looks as its predecessor. With a body crafted predominatly from aluminium, the LX7 certainly feels like a premium camera and our preview model also had a very slinky black semi-matte finish. It's also much more compact that many of its top-tier rivals.

Panasonic's LX range is essentially the same as the Leica D-Lux range and as such, the LX7 sports a fancy Leica DC Vario-Summilux F1.4 lens.

Panasonic Lumix LX7: Controls

The controls are similar to those found on previous LX models, with the handy addition of an aperture ring for more manual control. There's also a scroll wheel, handily located for you right-hand thumb.

The big news here is the addition of a new aperture ring for more manual control which is sure to entice some of the DSLR users who are looking for a good back-up compact camera.

Panasonic Lumix LX7: Picture quality

The brand new 10.1 Megapixel sensor combined with Venus Engine VII FHD engine results in the class-leading image quality that you'd expect when teamed with a Leica lens. The new sensor has been designed to cope well with low light conditions (with an ISO range of 80-12,800).

Although we didn't get to try out the LX7 in low light, is performed extremely well out in bright daylight and was especially good on macro shots.

Panasonic Lumix LX7: Video

Video can be captured in full 1080p HD up to 50 fps. We only had a quick go with the video mode and while the results looked pretty good for a compact, they didn't appear to be up to the standard that you'd get from a CSC or SLR. We'll look at this in more detail in our full review.

Panasonic Lumix LX7: Verdict

We only had limited time with the Panasonic LX7 but it looks set to be a damn fine high-end compact camera and we look forward to testing it out in full.

At first glance, we reckon that there could well be enough compelling new tech on board to tempt LX5 owners to upgrade. Keep your eyes peeled for a full review.

Panasonic Lumix G5 availability: September 2012

Panasonic Lumix G5 price: £449