If you've spotted flying saucers over Salisbury Plain recently, rest assured this time it definitely isn't aliens. David Clensy goes in search of some of the British Army's most intriguing secrets. Pictures: Jon Kent

I WALK through the eerie streets of a deserted Germanic village. Major Matt Kelly, of the Royal Irish Regiment, is leading the way. His eyes scan constantly from left to right, ever alert for hidden dangers.

The streets may seem deserted, but he knows that in the tricky world of urban warfare, death can be waiting for you around every corner.

It's impossible to know whether snipers' eyes are watching us from the dark shadows of the windows.

"Look to your right," Major Kelly whispers. At first I see nothing. Then I spot him – a guerrilla fighter lurking in the shadows, holding an AK47.

Thankfully, he's looking the other way, and we slip past.

But as we turn the next corner, there's no escaping the sights of the enemy marksman, who trains his rifle in my direction and, as time seems to slow down around me, I see his finger reaching for the trigger.

Luckily, we're not actually in war-torn Europe. We're walking through one of the British Army's most mysterious locations – Copehill Down village, in the middle of Salisbury Plain.

And the guerrilla fighters are actually British soldiers and a troupe of actors wearing foreign dress for the exercise.

"The village was built from scratch in the 1980s as a place for the army to train for urban warfare," Major Kelly explains.

"It was just before the Berlin Wall came down, and back then we thought if there was another war we would find ourselves fighting the Russians in northern Germany – that's why it's built to look like an average German village.

"The village was completed in 1989, just a few weeks before the wall came down and the Cold War ended.

"But the village wasn't wasted. It's been in constant use training soldiers in urban warfare ever since.

"Warfare has become urban. Since the end of World War II, the British Army has fought in urban operations in every single year, except 1968.

"Whether it's Aden, Northern Ireland, the Falklands, the Balkans, or more recently Iraq and Afghanistan, most fighting now takes place in towns and cities.

"And it's a very different type of warfare. You simply don't know what is lurking around any corner. As a soldier, you have to make quick decisions about whether a figure is an enemy fighter and an imminent threat to your life, or an innocent civilian."

In order to try to cut the numbers of men lost in urban battles, the British Army invited industry and academia to battle it out with a competition to come up with innovative automated vehicles that could make such warfare safer for our troops.

The Grand Challenge 2008 has echoes of the military competitions of the 1930s, which ultimately led to the creation of the Spitfire.

As well as being a step towards a lucrative contract with the military to produce the vehicles, the winners were also promised the glory of holding up the R J Mitchell Trophy – named in honour of the Spitfire's creator.

"We put the challenge out to industry and academia last year," says Andy Wallace, former Royal Army Ordnance Corps officer, and programme leader for the competition.

"We had a tremendous response, but finally whittled it down to 11 teams. Then we invited them all to Copehill Down to test their machines against simulated urban dangers."

The teams were set the challenge of scouting the village with their new technology, and reporting on the locations of enemy troops, marksmen, improvised explosive devices and 4x4s with machine guns mounted on the back – the makeshift armoured vehicle of choice by guerrillas across the Middle East.

The strange new inventions included a flying saucer, a mechanised version of tumbleweed and even a robot truck that had its own hot air-balloon, allowing it to gain an aerial view.

For Dr Paul Hill, of the University of Bristol's electrical and electronic engineering department, the competition's final challenge marked the culmination of more than a year's development work. He's been working with the Thales team to develop computer technology capable of recognising human figures and other potential threats to British soldiers.

The team is a joint endeavour with the University of Reading and a number of military hardware companies.

"We use two vehicles working in tandem – a model helicopter and an autonomous ground rover." The Thales vehicles use a range of audio, visual and thermal imaging sensors to try to make sense of what they're seeing in a battle zone.

"It sounds simple in theory," Paul says. "But when it comes down to actually designing software that allows a computer to recognise what is and isn't a potential threat, it's extraordinarily complex. It has been a true challenge, but I think we've produced an effective system.

"We've gone through months of trials with the technology, working in quarries near Wookey Hole to try to master the complex nature of the challenge. We're delighted to be given the opportunity to progress this far into the competition and try out our vehicles here at Copehill Down."

Compared to some of the teams, the Thales vehicles are relatively tame.

Team Swarm, from the University of Essex and the University of Sussex, created a series of autonomous "quadrotors" – that is, flat helicopters with four rotors – which would quite literally swarm around any suspicious objects while they worked together to record and identify them.

But in terms of sheer iconic status, you couldn't do much better than Team Mira – a team made up of a number of industry elements, including BAE Systems, working in conjunction with the University of Warwick and the Royal Grammar Guildford School. Their autonomous ground vehicle works in tandem with a genuine flying saucer – a circular, hovering craft, which works without any external rotor blades.

To see the flying saucer being tested quite seriously by the military over the buildings of Copehill Down is like stepping into a science fiction comic from your childhood.

But Major Kelly is clearly impressed, as he watches the saucer hover off into the distance, streaming back clear pictures of the village.

"I'm very impressed with all the vehicles we've seen," he says, from beneath his green-feathered cap. "I think we've witnessed the birth of some wonderful innovations, and who knows, perhaps one day some of these pieces of technology will become a common sight on the urban battlefield.

"If these machines can find the hidden snipers and the explosive devices before our men, then that has to be a very good thing."

For more information about the MOD's Grand Challenge 2008, visit www.challenge.mod.uk