Most small diesel cars can manage similar or better mpg ratings than the Prius. I've just bought a Ford Fiesta Econetic, which is a 1.6l diesel, and I'm averaging over 75mpg so far. If I tried hard I reckon I could hit 85-90mpg on an extended motorway journey. I recently managed a 32 mile journey on fairly flat Essex roads and hit an average better 99.9mph, which is all the trip computer could display.
A lot of it depends on how you drive the car too. It makes a significant difference doing 60mph instead of 70mph or 80mph. It makes no sense to buy a Prius for economy and then drive at 85mph on the motorway. Then again, not everyone wants to drive like grandma.
My Fiesta cost £13k with some extras, and I'd say is only a little smaller, and certainly better looking. Even that probably wasn't much economic sense, considering the basic 1.4l Fiesta diesel is much cheaper and can still manage 67mpg. So paying £18k for a Prius seems pretty crazy. I only justified it because I will probably keep the car for 10 years.