We present the results of a study based on an XMM-Newton Performance Verification observation of the central 30′ of the nearby spiral galaxy M31 .
In the 34-ks European Photon Imaging Camera ( EPIC ) exposure , we detect 116 sources down to a limiting luminosity of { 6 } { \times } 10 ^ { { 35 } } erg s ^ { -1 } ( 0.3–12 keV , d = 760 kpc ) .
The luminosity distribution of the sources detected with XMM-Newton flattens at luminosities below \sim 2.5 \times 10 ^ { 37 } erg s ^ { -1 } .
We make use of hardness ratios for the detected sources in order to distinguish between classes of objects such as super-soft sources and intrinsically hard or highly absorbed sources .
We demonstrate that the spectrum of the unresolved emission in the bulge of M31 contains a soft excess which can be fitted with a \sim 0.35-keV optically-thin thermal-plasma component clearly distinct from the composite point-source spectrum .
We suggest that this may represent diffuse gas in the centre of M31 , and we illustrate its extent in a wavelet-deconvolved image .