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For weight balance v power. The best block is a c16xe. As these can be tuned up to c20xe level (budget pending).
However, a 1.8 bottom with a 1.6 head works well too
but if you want power and then have to adjust driving style, a c20xe is great fun out of the packet, but then a let puts you right up there
as others said, small block v big block argument.
dan (old admin) had a really well set up 1.6 8v. Ben had a 1.4 8v on 40's that went really well and cp has a really good spec'd 1.4 16v and all these are some of the best handling cars I've been in/seen.
Personaly I think it's
Handling v power argument.
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Ive got a let in my sr and a standard 1.2 which is a good engine reliable and nippy for what it is. I love my let but get sick of running issues. One day its right the next time i drive it it plays up.lol
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Let in my opinion, can't beat effortless turbo pull. Few small mods and some stage 2 chips. 280/300bhp in something as light as a nova turns them into genuinely quick cars.
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Since you already have a let drop a 1.6 16v into the 1.2. Let would be my choice too though.
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After experiencing all except the v6 il be shot down in flames when i say a 1.6 8v.in the right state of tune with a good suspension setup,theres not alot else that can match point to point of that cc and size
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I do love the sound and power of the let. Was thinking to drop a 1.6 gte engine into my merit!
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In all seriousness it depends what you want. If you want economy and reliability then any small block in standard form should be fine but for power the XE (and I imagine let even more) is great fun but handling can become lazy and expensive. Personally having owned a small block (tuned 1.4 8v) and big block (XE) track car, the XE was faster but for me the 1.4 is more fun, thus I sold the XE.
My standard 1.3SR is not that far behind the 1.4 either and part of the fun is having to rev the teats out of them but the cam etc in the 1.4 makes the engine want to rev if you know what I mean.
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RB26DETT
Well, in all honesty, I think it's what's in your budget. A bigger engine would require a lot more work.
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For straight driving always the big hp, for quick good handle car smallblock.
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Never underestimate the joy of torque.
A sensible (silly) build of a 1.6 8v or a mid range 20XE build would be perfect imho.
The chassis thing is a fairly common solution for both big block and small block.