A Peel P50, officially recognised as the world's smallest production car, is expected to fetch as much as £60,000 at auction.

Iconic Auctioneers, of Ashorne, Warwickshire, has put an estimate of £40,000 to £60,000 on the microcar, which goes under the hammer on 14 November.

The three-wheeled vehicle measures just 4.5ft long and 3.5ft wide – enough room for one adult and one shopping bag.

The P50 was built by the Peel Engineering Company, which produced it on the Isle of Man in 1964.

When new, the car retailed at £199, equivalent to £3,635 today.

It was designed as a city car with a top speed of nearly 40mph. There is no reverse gear – instead, the driver must use a handle at the rear to lift the back end and swing the car around by hand.

The car was advertised as “almost cheaper than walking” due to its fuel economy.

The Guinness Book of Records gave the P50 official recognition as the world's smallest production car in 2010.

However, the design never took off, and only about 50 were built between 1962 and 1965 before the model was scrapped.

Fewer than 30 survive today, making them coveted by wealthy petrolheads.

The olive green car now being sold was imported new into Finland in 1964, and stayed there until earlier this year.

An Iconic Auctioneers spokesperson said: "Officially recognised as the smallest production car in the world and freshly arrived from Finland, this Olive Green Peel P50 tells a remarkable story.

"The Guinness Book of Records has officially recognised the Peel P50 as the 'World's Smallest Production Car'.

"From its harbourside base in the town of Peel on the Isle of Man, the Peel Engineering Company was a specialist producing boats and motorcycle fairings for the likes of Norton and BMW.

"Dreamed up by the company's founder, Cyril Cannell, the P50 was designed as a 40mph city car for 'one adult and a shopping bag' and was unveiled at the 1962 Earl's Court Cycle and Motorcycle Show with one wheel at the front and two at the rear.

"This layout was soon switched and with a 49cc two-stroke Zweirad Union/DKW engine driving the rear wheel through a three-speed manual gearbox, with the production model launched in 1963.”

The olive green Peel is “presented in unrestored and highly original condition wearing its years proudly”, the auctioneers said.

“Recently repatriated to the UK from Finland and ripe for a complete restoration, few Peel P50s can tell their story as well as this one."

Alex Lucocq, car specialist at Iconic Auctioneers, added: “The Peel P50 holds a special place in the hearts of many car enthusiasts and collectors.

“In the past 20 years, it has achieved something of a cult-like status. Well-known car personalities like Jeremy Clarkson have sung its praises, and for good reason – it represents the brilliance, creativity and eccentricity of the British car industry in the early 1960s.

“This desirability and the vehicle’s scarcity – only 30 are thought to exist today worldwide with them rarely coming to market – means an original, authentic Peel P50 is today often worth more than many British sports cars of the era.”

The auction takes place on 14 November.