You don’t have to sign a legal waiver before you drive the new Boss 302, but it might be an idea anyway. Because the car doesn’t just encourage you to act like a hooligan, it positively insists on it. The latest – and undoubtedly greatest – of the modern Mustangs, the new 302 is the best-balanced and most sorted muscle car you can buy today.

Developed over the past two years in plain sight on US race tracks as the Mustang 302R, the 2012 Boss 302 is the modern reincarnation of the 1969 original car which competed in the thunderously competitive Trans-Am series. It won outright in 1970, piloted by racing legend Parnelli Jones, and remained a front-runner for the two next seasons.

That car took a regular Mustang and tuned every part that could make the car go, stop and steer. It still looked pretty standard, but it was anything but underneath its battle-scarred skin. The engine was substantially reworked, the suspension beefed up and the gearbox swapped for a competition-grade Hurst unit.

It was a race-winning formula that worked then, and it's a similar approach that works so well on this version. Starting with the engine, the company takes the standard Mustang GT's 5.0-litre V8 and, among a long list of upgrades, drops on some exquisitely polished CNC-ported heads, adds twin independent variable cam-timing and a new intake system lifted from the 302R race car.

This work adds 32 horsepower, bringing the total to 444bhp at 7,500rpm - 1,000 rpm higher than stock. Peak torque is down 10lbft on the standard GT at 380lb ft, but you don't miss it. As you're generally far too busy burying the needle in the second half of the tacho. Instead of an aftermarket gearbox, Ford's engineers have tweaked the regular six-speed 'box to make it slicker, quicker and tougher.

The engine exhales through a system designed to offer the least restriction and maximum trademark muscle-car noise. The innovation here is a couple of extra exhaust vents that exit just behind the front wheels, which supplement the two main exhaust tubes. As rich and loud as the standard noise is, there are a couple of easily removable baffle plates which could be - and obviously this is only a suggestion - knocked out to make it even louder.

In the chassis department, the tweaks continue in the form of a larger-diameter rear stabiliser bar - the largest ever fitted on a production Mustang - higher-rate springs and stiffer bushings. All the dampers are also five-stage adjustable, requiring nothing more technical than a screwdriver to fiddle with them. The live rear axle (more on that later) features a shorter 3.73 final drive, and a limited-slip diff is standard.

The electronics have also been upgraded to include three-way adjustable steering weight - the only reason to swap from the middle option would be if you are feeling weak or want to build your upper body while you drive - but the two-mode stability control from the standard GT remains. However, the big news in this part of the car is something called TracKey.

A development of the MyFord smart key technology, which recognises your car set-up preferences via the key, TracKey is an altogether more interesting development. Supplied as a second key with the car, you can take it down to your dealer and for $302 they will flash the key's memory chip with a clever code. Once activated, all you have to do is insert the TracKey, and your Boss 302's evil twin emerges.Altering more than 200 engine-management parameters, it messes with the Boss's brain and turns the already tasty car into a hairy, savage beast. Tickover goes from a smooth thrum toa barely legal-sounding, lumpy chug; low-end torque increases; and the throttle turns from a pedal into a switch. Also included is a two-stage launch control, which allows you to preset the rpm then just hit the throttle and dump the clutch.

If it sounds extreme, it's meant to, because it is. As Mustang Chief Engineer Dave Pericak says: "Anything that could possibly affect all-out performance is deleted from the TracKey calibration. Any drivability enhancements are removed and replaced with pure Ford Racing competition calibration." And he's not joking. This is not just some upgraded Sport mode button - it's a full retuning of the whole engine.

But as radical as that sounds, that's still not the end of this story. As rabid as the standard Boss 302 is, there is still another level in its hierarchy available to true petrolheads - the Boss 302 Laguna Seca. Featuring all of the standard car's upgrades, this version is a bridge between the full 302R race car and the regular Boss 302.

Even more committed to track life, but still fully street-legal, the Laguna spec car has a whole raft of extra equipment - and a $7,000 price hike - to mark it out. Lightweight racing wheels - even wider at the rear than the standard car - plus R compound tyres start the spec that also includes an enormous front splitter that could double for a snow plough, a rear spoiler, a torque-sensing rear diff, a cross-brace where the back seat used to be, brake-cooling ducts and a red roof panel and decals.Both versions promise plenty and, on the track first, deliver in a phenomenally capable way. Ford reckons that the standard car is a second a lap quicker than an M3 around Laguna, with the Laguna edition being another second faster again. Without putting them back to back, it's hard to say if that's right, but on the basis of thrashing both cars on the track, it feels like it could be true.

The engine revs and revs, most unlike a big muscle-car V8, and the car remains fantastically stable through all the track's trademark turns. You get a real sense, particularly in the Laguna spec car, that every component has been tuned to work harmoniously with every other, encouraging you to wring its neck for lap after lap. At times, with the 5.0-litre engine on full song, the red-and-white kerbs blurring past, a small but constant squeal from the tyres filling the cabin, you forget that you are driving a muscle car. It's so neutral and natural you can steer it almost as much on the throttle as you can with the wheel.Even throwing the car off the blind cliff that is the entry to the Corkscrew, flat-out in third gear, doesn't really upset it. The steering gets light for a second, but then gets its composure back with plenty of time to really attack the technically more testing Turn Nine. This is the sort of behaviour you might expect of an M3 CSL, not a breathed-on muscle car. But as extraordinary as that is, the real shocker is what happens on the road.

With that live rear axle sitting out the back, you expect there to be some bumping and jumping as the car hits bumps mid-corner. And, sure enough, there is. But the key thing is that it happens in such a super-controlled way, and the steering is quick enough, that you can catch it before it becomes a problem. If anything, it makes driving it even more fun. Ford likes to say that a well-set-up live axle arrangement is better than a poor independent set-up, which is true. Particularly when the car costs just $40,995 and goes as fast as the Boss.The road we drove down is a TopGear favourite, all blind curves, adverse cambers and broken tarmac. Just like a gnarly British B-road. If a car has any faults, they are not going to be able to hide for long here. We've driven all of Europe's finest supersaloons - M5, C63 AMG, XFR - down the same stretch and all of them had problems at some point. The 440bhp Boss driver would have to work harder, for sure, but it's unlikely he'd get left far behind those costing between two and three times as much.

And it's that value proposition that keeps mugging you every time you think about criticising the 302. Yeah, the steering isn't reach-adjustable, and some of the interior plastics are a little too hard in places. But it's got huge Brembo brakes, Recaro seats, adjustable suspension, super-cool twin-mode engine-mapping, a mad V8, will do 100-metre burnouts all day, and it's a Mustang, damn it.

Only 4,000 Boss 302s will be built, with around 700 of those being the Laguna Seca edition. The original '69 car is now a very collectible - and drivable - classic. This one, the most sorted Mustang built to date, is heading straight into the same category. But don't take my word for it. Check out YouTube soon, and you're bound to see plenty of illegal reasons why.