2.0 all the way. Simple, standard engine, chuck it in, wire it up and you're away. 130bhp, 130/lbs/ft out the box, so the car will go ok, and as it's a standard engine, it should be reliable enough.

I've had a couple of 2.0 converted MK6 Escorts, and if you drive normally, they're no less economical than a 1.6 in reality, as you don't have to work it as hard for the same performance.