Prius, at its best doing exactly what you want it to do, nicer to drive than you'd think...smoooooth.

I agree with Gordon, the Toyota Prius is probably the only car which can meet all of those requirements. My workplace has two of them as pool cars and i used one for a day recently and you might find my review kicking about on here somewhere.

Its a big five door hatchback, automatic, plenty of room, its more economical round town than on the motorway as it uses its batteries more round town and uses no fuel at all when stationary. If you want a five door hatchback which is very economical round town and can put 5 people in (i assume you meant including the driver as i cant imagine you put 6 people in a Corsa) which is very cheap to run with bulletproof reliability then the Prius is the car for you.

For £7000 or less (good ones can be had for around 6 now) you can definately get a very good example. Some may have lots of miles on them but they're well documented to run to 200k+ with minimal issues. Its not a thrill to drive but its very comfortable and composed around town, it will do higher speeds without feeling like a liability and dont be put off by the hybrid technology as its reliability has been well proven. Oh and its only £10 a year to tax (would be £20 but technically the Prius is classed as an alternative fuel vehicle) and it runs on petrol which is cheaper than diesel and will still return 50+ in mixed driving. If you ever want to sell it, with fuel costs unlikely to come down far in future it'll find a buyer quickly and hold its value well.

Any alternatives fail to meet at least one of your criteria's. You could get a big 5 door diesel but for mostly town use on less than 10k a year its likely to throw up reliability issues with DPF's and not be cost effective. There are more economical cars than the Prius but they're small cars so thats no good either.