it will be a blown head gasket on number 1 cylinder its a common fault on the 8 valve 60 hp engine, usually between 40000 and 50000 miles. if you can DIY it will cost about £100 and thats including getting the head skimmed. good luck
firestarter
October 2010
does it use water/coolant?, if so, suspect a possible head gasket problem, or has it been parked up for a while, or been parked in such a way that water could have got in the exhaust(flood water,deep puddles,etc)in that case could just be evaporating moisture in the exhaust!
des
October 2010
check the engine water level possibly head gasket blown
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