In the pantheon of classic video game worlds, Grand Theft Auto IV's Liberty City would surely hold a pretty lofty seat. Even considering the formidable standards of the GTA universe, this living, breathing version of New York City really raised the bar to a whole new level. So it's perhaps fitting that the final episode from this acclaimed city will be bigger, bolder and brighter than ever. The Ballad Of Gay Tony rockets the player into the glossy world of Liberty City's high rolling billionaires who love flash cars, big guns and loose women (or men, as the case may be). So Digital Spy joined Rockstar Games for a hands-on with the final hurrah of this majestic metropolis.

As with February's first instalment in the episodic content for GTA IV - biker adventure The Lost And Damned - The Ballad Of Gay Tony will be an Xbox 360 exclusive available for download from Xbox Live. It will also be bundled with The Lost And Damned on the special edition Episodes From Liberty City disc for Xbox 360, which plays without the need for GTA IV. Rockstar has so far not confirmed any plans for a PS3 launch at some point in the future, but it would perhaps be surprising if the two episodes do not eventually find their way onto Sony's console.

Before entering the preview, Rockstar's representative revealed that both additional episodes were actually planned before Liberty City was built, making it essential to invest "blood, sweat and tears" in creating the gaming world. The story of immigrant Niko Bellic was deemed sufficiently interesting for GTA IV, but The Lost And Damned contrasted this with hard-hitting biker Johnny Klebitz, who had an already-established gang in The Lost and an equally-established list of enemies.

Wrapping the story up is The Ballad Of Gay Tony, which is focused on the hedonistic aspects of Liberty City, right at the heart of Algonquin's nightlife where money is no object and everything is about excess. Players take on the role of Luis Fernando Lopez (who eagle-eyed viewers may recognise from GTA IV mission Three Leaf Clover, where he was on the floor in the bank raid), the business partner, confidant and bodyguard to Tony Prince, aka Gay Tony.

As Liberty City's nightclub impresario, Gay Tony has been "ruling the roost as King, perhaps queen" of the city for the past ten years. Tony owns some of the hottest nightclubs in town, including Maisonette 9 and Hercules (which players will manage in side-missions, including getting the dancefloor going and ejecting moody patrons), but after selling stakes in the business to gangsters, Tony has a "big problem" when they want to cash in and get the money that he simply does not have. Therefore, Luis must keep the criminals off Tony's back and also stop him from having a nervous breakdown.

Upon entering the episode, the first thing you notice is the hyper-colour feel to everything, including the rainbow menu screen and purple heads-up display. Indeed, all the city's hues seem to have been amplified, which is a marked contrast to the murky, grey filter applied to The Lost And Damned. The episode also brings new gameplay elements and quirks to ensure that players never feel like they are just rehashing old ground. As Tony is a high roller, Luis gets access to some crazy weapons and gadgets with rather joyous results.

The preview involved four missions showcasing different aspects of the episode, starting with Dropping In. In this, Luis is joined by a henchman called Timur to intimidate the owner of Liberty City's ice hockey team The Rampage into selling. Paying him a visit at his penthouse involves the return of parachuting to GTA for the first time since 2004's San Andreas. Luis dives out of a helicopter and lands on top of the owner's building, before taking out his goons with the new P90 heavy duty machine gun.

In a nice touch of environmental destruction, Luis can fire at pipes sending out bursts of steam to flush out well dug-in enemies. An equally welcome addition is the sticky bombs, which can be placed on surfaces to set traps for enemies and then detonated by pushing down on the D-Pad (they can also be used out of car windows, similar to Johnny's pipe bombs in The Lost And Damned). After killing the owner (leading to a nice 'fall through the window and splat' cinematic), instead of fighting all the way back down the building, Luis simply jumps out of the window and parachutes onto a waiting truck to make a quick getaway.

Parachuting skills can also be sharpened up in The Ballad Of Gay Tony's basejumping side-missions, which are dotted around the city at marked points. These challenges range from flying through hoops to landing on a moving truck, and offer a nice break-up from the action. The next mission For the Man Who Has Everything introduces the character of Yusuf Amir, an excitable billionaire voiced by British-Iranian comedian Omid Djalili. Yusuf picks Luis up in a new car to the game called the Super Drop Diamond, which is based on the Rolls-Royce Phantom Drophead and has nice looks - but a terrible turning circle.

Yusuf wants an authentic Liberty City subway carriage to take back to the Middle East and so the mission involves Luis landing on the moving train and then fending off about a dozen police helicopters. To help him, Yusuf hands over the new AA-12 shotgun, which has some rather nifty explosive shells (this, along with a Rambo-style heavy machine gun are likely to become the must-have items for mass police shootouts). After downing the birds, Luis waits for Yusuf to fly the carriage out with a specialist chopper.

The AA-12 and sticky bombs also come in handy on next mission Going Deep, in which Timur and his boss Bulgarin want some detectives silenced who have evidence on them. After entering a subterranean car park, the policemen's vehicle is rigged with a sticky bomb, which are also liberally placed all over the parking so that when the cops turn up, they receive a baptism of fire. After mopping up the rest with the AA-12's explosive shells, Luis high-tails it out of there.

The final mission, Sexy Time, involved Luis attending Yusuf's tastefully-decorated apartment - giant dollar sign on the wall, video game machines and prostitutes upstairs - where he is asked to steal a high powered helicopter from an arms dealer on a luxury yacht. After snatching the chopper, Yousuf tells Luis to sink the yacht with rockets and chain guns, before chasing down and destroying three escaping speed boats to bring home the bacon. Missions such as this can also be replayed via the safehouse after the main story has been completed in a feature borrowed from handheld game GTA: Chinatown Wars.

In sum, The Ballad Of Gay Tony will be Liberty City in total overdrive, with incredible weapons, mental character and a whole load of explosions. New songs will be available on the radio - most likely dicso, bubblegum pop and dance tunes - and the basejumping, bar management and other side missions will likely bring more life to the story. The around 20 missions will take a similar time to play through as The Lost And Damned, which remains decent value for the price (although some may not think so). What is abundantly clear, though, is that Rockstar North wants The Ballad Of Gay Tony to ensure that Liberty City goes out with a loud and very proud bang.

GTA: The Ballad Of Gay Tony will be released worldwide on October 29.