Ferrari of the East is back on the road to give capitalists a run ...

Only 101 of the original RS1000s were made. The car allowed Mr Melkus to transform himself into a sports car racer, winning 80 Formula 3 rallies and becoming the champion driver of East Germany six years in a row. Using the one litre, three-cylinder Wartburg engine as a base, he tuned it up, installed a fifth gear and made it capable of a top speed of 160km/h (99mph).

He made his last low-slung, 75 horsepower, wing-doored RS1000 in 1979 because the supply of components was beginning to dry up as the centrally planned economy floundered. At the time, the waiting list for delivery of a Trabant stretched to ten years and the market for spare parts was tight.

The RS1000 has become a collectors’ item and only about 80 are still roadworthy.

The original East German model was sold for 28,000 East German marks; the reborn car, which has more than 300 horsepower, will go for €75,000 (£65,000), roughly the price of a Porsche.

Heinz Melkus, who died in 2005, founded the first privately run driving school in Dresden after the war at a time when private enterprise was regarded with suspicion by the communist authorities.

He tinkered with his fleet of driving school vehicles and realised that he had the raw materials to build his own car. Various scale models were constructed out of plaster of Paris on the kitchen table.

“The clinching moment came in the 1960s when he was on holiday in Yugoslavia,” Sepp Melkus, who is the chief executive of the Melkus company, said. “He was overtaken by a sleek-looking Lotus and from that moment on was determined to match the Lotus, at least in terms of stylishness.”

The designer was in luck. Despite the ideological opposition to private business, the Communist regime was looking for ways to demonstrate to the world that it was on the cutting edge of technology. The Melkus cars were declared part of the Socialist Racing Sport Association of Dresden — thus quelling any criticism that they were luxury products — and were hailed as a triumph of communism.

“I remember going on a test drive of the RS1000 when I was 14,” Mr Melkus’s son said. “It went like a rocket and it was so low to the ground that you had to stretch your neck to stare up.”