JAPAN: With petrol prices rocketing and the planet slowly cooking in its own carbon juices, a car that runs on water sounds too good to be true.

Japanese company Genepax rolled out a bubble-shaped two-seater last month that it claims is powered by nothing richer than the stuff that comes out of your tap.

Journalists were invited to view the car as it drove around Osaka city, stopping for a H2O refuel, which was poured into a generator about the size of a microwave oven stashed in the back. A Genepax spokesman explained that the generator extracts hydrogen from the water and produces electrons that power the car.

"As long as you have a bottle of water, this car will run forever," boasted Genepax chief executive Kiyoshi Hirasawa, who said that even green tea would do in a tight spot.

Naturally, the invention has provoked intense interest, not all of it welcome. The local media questioned its viability and scoffed at Genepax's claims that the car could cruise at a steady 80km for an hour on a single litre of water. Scientists demanded to see what was inside the generator. Genepax responded with a media blackout. So how does the "water energy system" work? According to Genepax spokesman Ryuza Takahashi, metal compounds inside the generator react with water to produce a chemical reaction that releases hydrogen. That has led to speculation that the generator is in fact a battery, which needs power.

But Takahashi says that until it "runs more tests" the firm is keeping its powder dry after what he calls misrepresentation in the media. "We are not aiming to mass-produce a car, only the generator," he explains, adding that the body of the vehicle was imported from India. The company is aiming for another water-tight media launch before looking for investment. Then will we finally see what's inside that technological black box? "We will never reveal that to our competitors," says Takahashi.