The history of the Cortina Lotus began in 1961. Colin Chapman had been wishing to build his own engines for Lotus, mainly because the Coventry Climax unit was so expensive. Colin Chapman's chance came when he commissioned Harry Mundy (a close friend and designer of the Coventry Climax engine and technical editor for Autocar) to design a twin-cam version of the Ford Kent engine. Most of the development of the engine was done on the 997cc and 1,340cc bottom end, but in 1962 Ford released the 116E five bearing 1,498 cc engine and work centred on this. Keith Duckworth, from Cosworth, played an important part in tuning of the engine. The engine's first appearance was in 1962 at the Nürburgring in a Lotus 23 driven by Jim Clark. Almost as soon as the engine appeared in production cars (Lotus Elan), it was replaced with a larger capacity unit (82.55 mm bore to give 1,557 cc). This was in order to get the car closer to the 1.6 litre capacity class in motorsport.
Whilst the engine was being developed, Walter Hayes (Ford) asked Colin Chapman if he would fit the engine to 1,000 Ford saloons for Group 2 homologation. Chapman quickly accepted, although it must have been very busy in the Cheshunt plant, with the Elan about to be launched. The Type 28 or Lotus Cortina or Cortina Lotus (as Ford liked to call it) was duly launched. Ford supplied the 2-door Cortina bodyshells and took care of all the marketing and selling of the cars, whilst Lotus did all the mechanical and cosmetic changes. The major changes involved installing the 1,557 cc (105 bhp (78 kW; 106 PS)) engine, together with the same close-ratio gearbox as the Elan. The rear suspension was drastically altered and lightweight alloy panels were used for doors, bonnet and boot. Lightweight casings were fitted to gearbox and differential. All the Lotus factory cars were painted white with a green stripe (although Ford built some for racing in red, and one customer had a dark blue stripe due to being superstitious about green). The cars also received front quarter bumpers and round Lotus badges were fitted to rear wings and to the right side of the radiator grille.
Interior modifications were limited to a centre console designed to accommodate the new gear lever position, different seats and the later style dashboard, featuring tachometer, speedometer, oil pressure, water temperature and fuel level gauges. A wood-rimmed steering wheel was fitted.
The suspension changes to the car were quite extensive; the car received shorter struts up front, forged track control arms and 5.5J by 13 steel wheel rims. The rear was even more radical with vertical coil spring/dampers replacing the leaf springs and two trailing arms with a A- bracket (which connected to the differential housing and brackets near the trailing arm pivots) sorting out axle location. To support this set-up, further braces were put behind the rear seat and from the rear wheelarch down to chassis in the boot. The stiffening braces meant that the spare wheel had to be moved from the standard Cortina's wheel well and was bolted to the left side of the boot floor. The battery was also relocated to the boot, behind the right wheelarch. Both of these changes made big improvements to overall weight distribution. Another improvement the Cortina Lotus gained was the new braking system (9.5 in (240 mm) front discs) which were built by brake specialist Girling. This system also was fitted to Cortina GTs but without a servo, which was fitted in the Cortina Lotus engine bay.
Initially, the engines were built by J. A Prestwich of Tottenham and then Villiers of Wolverhampton. In 1966, Lotus moved to Hethel in Norwich where they had their own engine building facilities. The Cortina Lotus used a 8.0 in (200 mm) diaphragm-spring clutch, whereas Ford fitted coil-spring clutches to the rest of the range. The remainder of the gearbox was identical to the Lotus Elan. This led to a few problems because although the ultra-close gear ratios were perfect for the race track or open road, the clutch was given a hard time in traffic. The ratios were later changed.
The early cars were very popular and earned some rave reviews; one magazine described the car as a tin-top version of a Lotus 7. It was 'THE car' for many enthusiasts who before had to settle for a Cortina GT or a Mini-Cooper and it also amazed a lot of the public who were used to overweight 'sports cars' like the Austin-Healey 3000. The launch was not perfect however, the car was too specialist for some Ford dealerships who did not understand the car; there are a few stories of incorrect parts being fitted at services. There were a few teething problems reported by the first batch of owners, (most of these problems show how quickly the car was developed) some of the engines were down on power, the gear ratios were too close and the worst problem was the differential housing coming away from the casing. This problem was mainly caused by the high loads put on the axle because of the A bracket it was an integral part of the rear suspension. This was made even worse by the fact any oil lost from the axle worked its way on to the bushes of the A bracket. There were four main updates made to the Mk1 Lotus during its production to solve some of these problems. The first change was a swap to a two-piece prop shaft and the lighter alloy transmission casing were changed for standard Ford items; this also included swapping the ultra close ratio gears for Cortina GT gear ratios, the main difference was first, second, and reverse were much higher ratios. from 1964, standard panels were used rather than the light alloy ones. Alloy items and ultra-close ratios coulds be specified when buying new cars.
The second main change came in late 1964 when the entire Cortina range had a facelift which included a full width front grille and aeroflow outlets in the rear quarters because the Cortina Lotus also gained Ford's new ventilation system which also included an update to the interior. The third and probably most important change came in mid-1965, when the Lotus rear suspension was changed for the leaf springs and radius arms of the Cortina GT. This replaced all the stiffening tubing as well. The last update also came in 1965 when the rear drums were swapped for self-adjusting items and also the famous 2000E gearbox ratios were used. These lowered first and reverse about halfway between the Cortina GT ratios and the ultra close-ratio box. All these changes made the cars less specialised but far more reliable and all the special parts were still available for competition as well as to members of the public.
The Cortina Lotus had by this time earned an impressive competition reputation. It was also being made in left hand drive when production finished around late 1966 and the Mk2 took over.