The paper focuses on the development of a novel DSP based high performance speed sensorless control scheme for PWM voltage source inverter fed induction motor drives. Firstly, two generic torque and flux control methods the Field Oriented Control (FOC) and Direct Torque Control (DTC), are briefly described. For implementation the sensorless scheme DTC with Space Vector Modulation (DTCSVM) has been selected because it eliminates the disadvantages associated with the DTC while keeping the advantages of both FOC and DTC. Secondly, the simple flux vector observer allowing speed sensor elimination is given. The novelty of the presented system lays in combining the DTC-SVM structure with a simple observer for both torque/flux and speed sensorless control. Furthermore, the DTC-SVM structure which operates in speed sensorless and torque control mode is presented. Finally, the description of a 50 kW laboratory drive and experimental results illustrating properties of the system are given.