I'm pretty sure the light is the low level coolant light. Remove the expansion bottle cap on the left of the radiator and check you can see coolant in there.
The light is not covered in the handbook for some reason.
FYI The water in fuel light depicts an oval with the bottom half coloured black the top half yellow. It has what looks like a pipe running across the top.
The water in fuel light is yellow. I'm not sure of the colour of the low coolant light as it has never shown on my 306 but on my previous 205 it was red.
Ross
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