Im a 206 owner & I had the misfortune to be leant a 207 for a day, total letdown & disappointment in my eyes.
If your set on a 207 then hire / borrow one for a few days & see if you can put up with it.
New Corsa would be worth a test drive.
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Someone will be along shortly to recommend a Suzuki Swift.
If you want a diesel, Mazda2 might be worth thinking about. There are not many around, but they have a reputation for reliability, and apparently fun to drive. Which? reckon that they are very under-rated.
A fairly fun, reliable, diesel supermini is the Skoda Fabia vRS - a little above your price range, but you could get one a year or two old - or spend a few pounds more.
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I've just realised that there is a Suzuki Swift diesel - which is in your price range
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