Buy a car with 300bhp or a MK4 with a 1.8T
A few years ago, a conversion would be a cheap way of doing things but you can pick up MK4's for so little these days its not worth it.
Add to the fact you'll need literally EVERYTHING from the front end of the 1.8T from driveshafts, to hubs, anti-roll bar, coolant pipes etc etc
My mate Dai converted his 2.0 and needed all the above plus more. He was lucky in that he bought a donor vehicle, was handy with a spanner or two, and had a couple of people to help out

He made a few quid by breaking the donor vehicle.
Converting a 1.6 will be just as hard, if not harder and is not worth the hassle IMO