I always thought it would be cheaper and more cost effective to buy something like a 1.6 if you want to do it right. If you will completely upgrade the car then it's a good start. Ideally you would want a written off car so you can use any parts you might need.
Off the top of my head the bare minimum would be Engine (+fuel pump and other ancillaries), exhaust, gearbox, driveshafts, ECU and wiring, and instrument cluster.
Other things you would want are brake and suspension upgrades, im sure they are not as good on the 1.6 as the 1.8T.